IIICorp Exclusives

Longi Silicon Materials to invest USD 240m in Malaysian fabrication plant; project finance opportunities available

 

Longi (HK) Trading Limited (隆基香港贸易有限公司) plans to invest USD 240m (CNY 1.6bn) in the construction of a fabrication plant called Longi (Kuching) Sdn Bhd(古晋隆基) in Malaysia, according to Mr. Wang Hao (王皓), who is the Securities Affairs Representative at the subsidiary of Xi’an Longi Silicon Materials Corp.(西安隆基硅材料股份有限公司).

The facility, which is to be located at the Sama Jaya Free Industrial Zone in Kuching City, Sarawak State, will comprise production capacities of 1 GW of wafers, 500MW of monocrystalline silicon solar cells, 500MW of PV modules and 300MW of ingots.

The project, which is scheduled to become operational in the first quarter of 2017, is expected to generate annual revenues of USD 318m (CNY 2,12bn) from which it will yield a net profit of USD 13.4m (CNY 89.44m).

“The total project investment (TPI) is USD 240m and Longi Kuching is the main investor,” Wang told this news serice. “The source of funding comes from the parent company Longi Silicon Material as well as bank loans.”

Longi Silicon Materials has applied for debt finance from Industrial Bank Co Ltd, Xi’an branch (兴业银行西安分行) and the Industrial and Commercial Bank of China‘s  Yunfu branch (中国工商银行云浮分行). Banks in mainland China, Hong Kong and Malaysia will also be able to get involved depending on how favorable the conditions are, Wang added.

Besides the project in Malaysia, Longi Silicon Materials has invested in setting up an integrated solar plant in an Indonesian industrial zone this year, which is expected to be completed and begin operations by the end of 2016. Considering the production costs and expected profits, Southeast Asia is viewed as a deserving target for future investments, Wang observed.

Longi Silicon Materials achieved operating income of USD 968m (CNY 6.424 bn) in the first half of 2016, which represented a 282.15% increase year-over-year. In terms of profits, the company posted a net increase of 634.2% in the space of a year, reaching H1 profits of USD 130m (CNY 866m), according to the company’s latest financial report.

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Opportunity of the Week: GCL-Poly Energy to build a 1200T/D waste incineration plant with USD 45m in Henan

GCL-Poly Energy Holdings Limited, the subsidiary of Golden Concord Holdings Limited (GCL Group), will build a new waste-to-energy (WTE) plant in Yongcheng city in Henan province. An estimated total project investment (TPI) of USD 45m (CNY 300m) will be required to build the 1200 tons per day (T/D) WTE plant, according to Dai, the project contact person.

Dai explained that the core employed equipment consists of three 400T/D mechanical grates, 12MW and 18MW condensing steam turbine generators as well as 12MW and 18MW electricity generators. Heat recovery steam generators (HRSG), automated control devices, and crushers will also be needed. Apart from above equipment, the WTE station will also entail environmental protection measures, including fly ash stabilization processing, flue gas treatment, and leachate treatment. He said equipment procurement will be after the environmental impact assessment (EIA), maybe later this year.

Dai said that project financing is from bank loans and company assets. Credit is being granted by five major banks in China, including Bank of China Limited, Agricultural Bank of China (ABC) (中国农业银行), China Construction Bank Corporation (中国建设银行股份有限公司), Industrial and Commercial Bank of China Limited (ICBC) (中国工商银行), and Bank of Communications Ltd (BOCOM Securities). However, he did not provide the loan amount each bank would provide.

Jiangsu Academy of Environmental Industry and Technology Corporation Ltd is undertaking the EIA. Now they are working on the first draft of the EIA report after receiving some public suggestions.

 

 

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Eight Rivers Energy fine tuning PPA for 50MW solar plant before issuing RFP for EPC and locking in financing

Eight Rivers Energy Company Limited (EREC), a solar power developer, is fine tuning its power purchase agreement (PPA) with Jamaica Public Service Limited (JPS) before issuing a request for proposals (RFP) from EPC firms and locking in the debt component of its project finance, partner and Managing Director Angella Rainford said.

A JV held by Rainford’s UK-based Rekamniar Frontier Ventures and Paris-based Neoen SAS, EREC was awarded a 37MW renewable energy tender issued by Jamaican regulator, Office of Utilities Regulation (OUR) in May 2016 at a feed-in rate of USD 0.0854 per kWh, the lowest to date in the country. The cost of capital and the developer’s ability to lever the project, along with a significant drop in equipment costs, allowed EREC to bid at such a competitive rate, Rainford said, noting the USD 50m project would have cost at least twice as much to build just a few years earlier.

EREC is building to a gross capacity of 49.5MW, at a cost of about USD 1m per MW, Rainford said, noting the efficiency of the modules, the technology and yield had improved tremendously since the partners began exploring the project in 2012 when OUR originally announced it would tender up to 115MW of renewable energy. The capacity EREC was awarded was the last tranche, following the award of 78MW to solar and wind developers WRB Energy and Blue Mountain Renewables (BMR) respectively.

EREC is finalizing the details of its PPA with Jamaica’s power distribution monopoly JPS by November, before launching an RFP for the EPC work by late 3Q16 or early 4Q16 and closing financing by mid-2017, Rainford said. Eight Rivers will invite pre-qualified EPC bidders to respond and then evaluate each based on a list of criteria, including balance sheet, warranties, and project references, she noted. Neoen’s engineer will help draft and issue the RFP, Rainford said. She noted Neoen has an EPC arm, but that the selection process would be carried out competitively. Spain-based turnkey solar project developer Sofos Energy, which has participated in several other photovoltaic (PV) projects in Jamaica and around the Caribbean, will likely be among the EPC firms invited to bid, she said.

The project developers are seeking 75% to 80% debt finance and are in discussions with international, regional, and multilateral lenders, including the Inter-American Development Bank (IDB) and the International Finance Corporation (IFC). The equity partners have a long-term hold strategy with no defined timeline for an exit, Rainford said.

Eight Rivers partners have yet to determine whether they will allow the EPC to source the panels and inverters required for the 50MW solar farm, or whether the equipment will be sourced directly by the equity partners. More than likely, the developers will allow the EPC to take responsibility for sourcing the equipment and ensuring its integrity, Rainford said. “My view is that we’ll have a single point; single point risk, single point accountability,” she said.

The construction period is projected to last nine to 10 months, but the developer is budgeting a year conservatively, Rainford said, noting the project is expected to be online by the end of 2018.

Neoen is a Paris-based renewable energy company founded in 2008 with 750MW of assets, between those in operation and under construction. Neoen ia backed by Paris-based family office Omnes Capital and sovereign wealth fund Bpifrance, the latter acquiring a 15.4% stake in 2014.

 

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AVR Vidyuth looking for foreign investors for developing 225MW gas-based power plant

AVR Vidyuth Private Limited is planning to start discussions with foreign investors to raise funds for developing a 225MW gas-based power plant at Adavipolam in Yanam district of Puducherry, said Vishnu Vardhan Rao, MD, AVR Vidyut. The company is also looking for a foreign EPC contractor to invest in the project, he added.

Rao said that the proposed project has been approved by the government of Puducherry. Land required for the project has also been procured. Once a foreign investor and an EPC contractor is finalized, AVR Vidyuth will approach the government of Puducherry for allocation of gas required for the project, he added.

The total cost of developing 1MW of gas-based power will be about USD 750,000 (Rs. 5 crore), said Ashok Kumar, Administrator, AVR Vidyuth. Based on this metric, the total project investment (TPI) of the 225MW power unit will be around USD 168.7m (Rs. 1125.8 crore).

Project equipment would typically include air compressors, gas turbines, steam generators, combustion chambers, condensers, fuel burners, jet pipes and propelling nozzles, fuel valves, and synchronous generators, among other equipment.

 

 

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IIICorp Opportunity of the Week: Sonnedix gets loan approval from Green Climate Fund for 143MW solar project in Chile worth USD 265m

The South Korea-based Green Climate Fund recently approved a loan worth USD 49m to a large-scale solar PV project coming up in the Atacama desert in northern Chile implemented by US-based independent power producer (IPP) Sonnedix. Sonnedix, founded in 2010, has raised over USD 554m in equity to date from founders, management, private, and institutional investors. Sonnedix is a JV owned and controlled by Sonnedix Global Holdings Ltd and IIF Solar Investment Ltd (JPM IIF), an entity controlled by the Infrastructure Investment Fund.

The project will have an installed capacity of 143MW (likely AC-rated, while DC-rated capacity will be around 170MW). The project will have the capacity for expansion up to 250MW. The project is expected to require a total investment of USD 265m, with the USD 49m loan being disbursed through the Development Bank of Latin America (CAF). The project will start selling electricity at USD 4.4 per kWh from 2017 onward. This tariff is however expected to increase gradually to reach USD 8 per kWh by 2035.

The EPC and operation and maintenance (O&M) for the project is by Biosar Energy SA, which was acquired in 2012 by the Greece-based AKTOR S.A.

To connect the Atacama solar PV plant power substation, 45.5km of transmission lines and grid connection equipment at the Lagunas substation will be developed by Transelec SA under a build-own-operate-transfer (BOOT) contract and repaid under a 25-year lease with fixed payments and repurchase option of USD 1.

Recently, the Chile government approved legislation that will create a new interconnected transmission network to be established alongside a new independent operator. This will ensure that power generated from renewable energy projects located in remote regions of the country is supplied to population centers.

 

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IIICorp Opportunity of the Week: Unitel’s two-pronged strategy gains momentum in Southeast Asia, lands PT Pertamina catalyst systems deal

Unitel Technologies is supplying Indonesian state-owned oil firm PT Pertamina with its proprietary Octave catalyst research system under the terms of a deal signed recently, according to CEO Serge Randhava. Meanwhile, the company is laying the groundwork to capitalize on a major natural gas-related opportunity in the region.

The deal with PT Pertamina is likely to be worth about USD 2m for the Matawan, New Jersey-based specialty process engineering firm that designs and builds pilot- and full-scale oil and natural gas processing facilities. In March, the CEO told this news service that his firm was in talks to supply Octave systems to multiple oil companies in Southeast Asia.

Unitel’s revenues typically do not exceed USD 15m annualy because it’s primarily a technology firm and sub-contracts much of the engineering work required for its projects to other companies.

Regional LNG opportunities

Randhava said that the opportunity to sell catalyst research systems in Indonesia, and Southeast Asia at large, pales in comparison to opportunities to sell its process engineering services and technologies to the region’s liquefied natural gas (LNG) industry.

Unitel was selected earlier this year by the Korea Gas Technology Corporation (KOGAS) to conduct the front end engineering and design work needed to commercialize a “small-scale LNG business opportunity,” according to a press release from January. KOGAS, the world’s largest importer of LNG, is aiming to design, build and operate multiple 200 TPD LNG mini-plants that will create a virtual pipeline to supply product for local transportation fuel and power generation applications, Randhava said. Eventually, the Korean company would like to build the small-scale plants in countries in need of critical natural gas infrastructure, he said.

“The opportunities to develop small-scale LNG plants should be of great interest to countries like Vietnam, Malaysia and Indonesia,” Randhava said. “I’m excited about that; [KOGAS] is aggressive.”

One application for the small-scale LNG technology KOGAS is developing might be at the Vietnam Block B development, Randhava said. PetroVietnam is aiming to produce 107bn cubic meters of gas and 12.65 million barrels of condensate from offshore Block B, of which 5.06bcm are expected to be brought onshore per year from 2020 to 2040. The fuel is expected to be used to power plants in the Kien Giang and O Mon district of Can Tho city. The initiative entails an investment of about USD 6.08bn.

Randhava noted that the company plans to move onshore only about half of the gas it is producing from Block B. He said that it is likely planning ot either make LNG in small-scale plants onshore for distribution throughout the country, or convert it into dimethyl ether for use in Vietnam and neighboring countries.

Opportunity Size: 15m USD

 

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IIICorp opportunity of the week: GMH seeks funding for proposed USD 800m Tamil Nadu-based TPP

General Mediterranean Holding (GMH) is looking for financiers for its proposed 1030MW merchant thermal power plant at Kattuppalli Village in Thirvallur district in Tamil Nadu (TN), according to Justin Paul, the President Technical at Chennai Power Generation Limited (CPGL), the Indian subsidiary of the Luxembourg-based company.

“The project is awaiting environment clearance, land acquisition, and fuel-supply agreement for the power plant and we will look at financial closure of the plant in the first quarter of 2018,” Paul told this news service.

The company president did not provide a timeline when the EPC tenders would be invited but said that the bids would be invited soon after the environment clearances and fuel supply agreements are in place.

The 1030MW power project had experienced difficulties when North Chennai Power Company Limited refused to spare 70 acres of land to CPGL for the plant due to a reported overlap in location of the two companies’ power plants. The terms of reference (ToR) for the project were initially issued in 2009, however these expired in 2013 due to the inability to resolve the land issue. A fresh application to issue the ToR was submitted in September 2015, which was approved in early June this year.

The total project investment (TPI) comprises USD 788.5m (Rs. 5245.6 crore) and the facility will source coal from Indonesia and Australia. It will consist of two 515MW steam turbine generator (STG) sets and two pulverized coal-fired subcritical boilers. The balance of plant (BoP) package will comprise the coal and ash handling plant, water treatment plant, desalination plant, compressed air system, electrical controls, instrumentation and control, and chimney, all of which cost USD 639.3m.

The total plant area will cover about 319 acres of land, including an ash pond area, along with 23 acres within Coastal Regulation Zone (CRZ) area that will be utilized as corridor for sea water pipeline and for coal conveying at a total cost of USD 27.5m.

There will also be a requirement for the installation of electrostatic precipitators (ESPs) and flue gahis weeks desulfurization (FGD) systems however these will be decided based on the fuel supply agreement signed.

“If required, we will invite separate bids for the construction of the FGD plant,” said Paul.

 

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