Biomass Fuel Power Project

1
Biomass Fuel Power Project

• An Alternative Approach for Green Energy
• Case Study on Project Structure and Financing

Dr. Siwannan Na
Nakorn Senior Executive Vice President-New
Business Ventures Electricity Generating Public
Company Limited (EGCO)
2
CONTENTS

• BIOMASS FOR BETTER ENVIRONMENT
• ABOUT BIOMASS
• SOCIAL BENEFITS
• EGCOS GREEN ENERGY PROJECTS
• ROI-ET GREEN
• YALA GREEN
• HUAY YOD

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BIOMASS FUEL FOR BETTER ENVIRONMENT
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ABOUT BIOMASS

• BIOMASS IS ENVIRONMENTAL-FRIENDLY FUEL SINCE IT
  CONTAINS LOW SULFUR CONTENT (lt0.1) AND CO2
  NEUTRAL
• BIOMASS PROJECT IS STRONGLY SUPPORTED BY NEPO
• BIOMASS PROJECT IS NOW THE ONLY PROJECT THAT EGAT
  WILL PURCHASE POWER UNDER SPP SCHEME
• GLOBAL ENVIRONMENT FACILITY (GEF) BY UNDP IS
  ASLO APPRAISING PROJECTS ( Roi-Et Green and Wood
  Chip - Fired Project) TO PROVIDE UP TO 3M GRANT

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SOCIAL BENEFITS

• BEST WAY TO DISPOSE THE WASTE FROM LOCAL RICE
  MILLS AND SAW MILLS
• RESOLVE THE DUST PROBLEM FROM THE RICE MILL
• RESOLVE WASTE WATER PROBLEM FROM WOOD CHIPS
• JOB CREATION FOR LOCAL PEOPLE
• REDUCE IMPORTED OIL BY USING IN HOUSE FUEL
• REDUCE CO2 EMISSION AND GREEN HOUSE EFFECT

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EGCOS GREEN ENERGY PROJECTS
EGCO
EGCO GREEN
GEC
ROI-ET GREEN Rice Husk Fired Power Plant in
Roi-et 8.8 MW
YALA GREEN Wood Chip Fired Power Plant in
Trang 17 MW
HUAY YOD Wood Chip Fired Power Plant in Yala 17 MW
Under Construction
Under Implementation
Under Development
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ROI-ET GREEN Company Limited (RICE HUSK - FIRED
POWER PLANT)
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ROI-ET GREEN

• PROJECT OVERVIEW
• SITE LOCATION
• RICE PRODUCTION
• RICE HUSK AVAILABILITY
• FUEL SUPPLY STRUCTURE
• POWER PURCHASE AGREEMENT
• PROJECT STRUCTURE
• PROJECT COST FUNDING
• PROJECT FINANCING STRUCTURE
• GUARANTEE SCHEDULE

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PROJECT OVERVIEW

• LOCATION ROI-ET PROVINCE
• LAND 15 RAIS (6 ACRES) ADJACENT TO SOMMAI
  RICEMILL
• FUEL SUPPLY 300 T/D OF RICE HUSK
• SUPPLIER 300 T/D FROM SOMMAI RICE MILL
• LHV 12.8 MJ/KG (3,061 KCAL/KG)
• POWER OUTPUT 8.8 MW (NET) SOLD TO EGAT
• COD APRIL 2003

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SITE LOCATION

• RICE IS WIDELY CULTIVATED IN THE NORTH-EAST
• ABUNDANT OF RICE HUSKS IS PRODUCED FROM THE RICE
  MILLS

ROI-ET
BANGKOK
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Rice Mill in Roi-Et Area
????????? 3
??????????????
SOMMAI RICE MILL POWER PLANT
???????
?????? ???????
RIC
??????
0 10 km RICE
MILLS IN THE VICINITY
???????????
????????
?????? ??????????
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RICE PRODUCTION
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RICE HUSK AVAILIBILITY

• MACHINE CAPACITY FOR RICE PADDY AT SOMMAI RICE
  MILL GROUP
• 
  CAPACITY OPERATION RICE HUSK
• 
  ( TON/DAY) HOURS (TON /DAY)
• SOMMAI RICE MILL 2,000
  24 460
• SOMMAI SELAPHUM 300
  8 23
• SOMMAI SUWANNAPHUM 200
  8 15.3
• SRISANGDAO 1 500
  24 115
• SRISANGDAO 2 200
  8 15.3
• TOTAL 628.6

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FUEL SUPPLY STRUCTURE
Mill 2
Mill 3
SOMMAI
Long-Term Contract
Short-Term Contract Spot
AGRO ENERGY
Long-Term Contract
ROI-ET GREEN
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POWER PURCHASE AGREEMENT (PPA)

• FIRM CONTRACT TO EGAT FOR 21 YEARS
• REGULAR SPP CONTRACT EXCEPT FOR THE MINIMUM
  OPERATING HOUR OF 4,672 HOURS INSTEAD OF 7,008
  HOURS IN A YEAR FOR BIOMASS PROJECT (must run
  during peak summer monthsMarch-June)
• YEN INDEXATION IN CAPACITY CHARGE
• HEAVY OIL PRICE INDEXATION

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PROJECT STRUCTURE
EGCO
EPDC
74
26
EGCO GREEN
SOMMAI
95
5
LOAN
ROI-ET GREEN
IFCT
COLLATERAL
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PROJECT COST FUNDING

• USES OF FUND
• ROI-ET PROJECT 600 MILLION BAHT
• SOURCES OF FUND
• DEBT TO EQUITY 70 30
• EQUITY 180 MILLION BAHT
• LOAN 1,300 MILLION YEN

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PROJECT FINANCING STRUCTURE

• DEBT / EQUITY 70/30
• LENDER THE INDUSTRIAL FINANCE CORPORATION OF
  THAILAND (IFCT)
• TOTAL FACILITY 1,300,000,000 YEN
• INTEREST 4-5
• TERM 12 YEARS REPAYMENT WITH 2 YEARS GRACE
  PERIOD
• SCHEME PROJECT FINANCE CORPORATE FINANCE
• SPONSOR GUARANTEE SPONSOR SUPPORT, FUEL SUPPLY
  SUPPORT , LETTER OF GUARANTEE
• GEF SUPPORTS THIS PROJECT AS A PILOT PROJECT

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GUARANTEE SCHEDULE
COD
End of Debt
End of PPA
2001 2003 2011
2016 2024
Sponsor support
Fuel Supply Support (FUEL RISK)
Letter of Guarantee (TECHNICAL RISK)
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PROJECT SCHEDULE
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Plant Layout
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Turbine Boiler Building - September 2002
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Transmission Line Connection
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Raw Water Supply Route
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Access Road Reservoir
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YALA GREEN PROJECT(RUBBER WOOD WASTE - FIRED
POWER PLANT)
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PROJECT OVERVIEW

• LOCATION YALA PROVINCE
• LAND 40 RAIs (16 ACRES)
• (20 RAIs FOR ASH LAND FILL)
• FUEL SUPPLY 660 t/d OF RUBBERWOOD WASTE
• SUPPLIERS 300 t/d FROM LOCAL PARTNER
• 360 t/d FROM
  VICINITY SAWMILLS
• LHV 9.0 MJ/kg (2,150 kcal/kg)
• POWER OUTPUT 17 MW (net) SOLD TO EGAT

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UTILIZATION OF RUBBER TREE
GROWING (YEAR 0-5)
RUBBER REPLATING AID FUND
55
REPLANTING (YEAR gt25)
45
TAKING LATEX (YEAR 6-25)
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POWER PLANT
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RUBBER INDUSTRY
WOOD INDUSTRY
FURNITURE INDUSTRY
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RUBBER MARKET

• WORLD RUBBER SUPPLY GROWS AT 5.3 ANNUALLY
• WORLD RUBBER DEMAND GROWS AT 3.2 ANNUALLY
• THAILAND IS THE BIGGEST RUBBER PRODUCER
• WITH GROWTH RATE OF 6.8 PER ANNUM
• ACCOUNTS gt31 OF THE WORLD PRODUCTION
• EXPORTS 90 OF PRODUCTION
• IN 1998, EXPORTED 56 BILLION BAHT
• MAJOR RUBBER MARKETS ARE U.S., EU, CHINA, AND
  JAPAN

PRODUCTION (MILLION TON)
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RUBBERWOOD FURNITURE MARKETS
EXPORT OF RUBBER WOOD FURNITURE

• THE INDUSTRY HAS BEGUN SINCE 1987 IN THAILAND
• ALL LOGS ARE CONSUMED IN FURNITURE INDUSTRY
• 80 OF PRODUCTION IS EXPORT
• IN 1998, EXPORT AMOUNT TO 10.7 BILLION BAHT
• 70 SOLID WOOD FURNITURE AND 30 MDF PARTICLE
  BOARD
• MAJOR MARKETS ARE JAPAN, U.S. AND EU

MILLION BAHT
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CENTERS OF RUBBERWOOD FACTORIES RUBBER TREE
PLANTATION AREA
Source Industry Economic Center (1998) and
Ministry of Agriculture Co-orperative (1996)
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FUEL SUPPLY ARRANGEMENT

• WOOD DEMAND- 660 t/d AT POWER PLANT
• WOOD SUPPLY 660 t/d
• LOCAL PARTNER 300 t/d
• OTHER SAWMILLS 360 t/d
  (WITHIN 50 km. RADIUS)
• BUFFER OF WOOD 1,350 t/d
• OTHER SAWMILLS 220 t/d
  (WITHIN 50 km. RADIUS)
• PLANTATION FIELD- 1,130 t/d IN YALA
• BACK-UP FUEL WILL BE HEAVY FUEL OIL (OPTION)

POWER PLANT
MAIN FSA
ASIA PLYWOOD
SAWMILL 1
OTHER SAWMILL
SUB- FSA
SAWMILL 2
SAWMILL 4
SAWMILL 3
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PROJECT STRUCTURE
EGCO
EPDC
50
50
GULF ELECTRIC
ASIA PLYWOOD
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74
LOAN
YALA GREEN POWER PROJECT
BAY
SECURITY
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Rubber Wood Waste
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PROJECT COST FUNDING

• USES OF FUND
• YALA PROJECT 1,500 MILLION BAHT
• SOURCES OF FUND
• DEBT TO EQUITY 7030
• EQUITY 453 MILLION BAHT
• LOAN UP TO US 23 MILLION

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PROJECT FINANCING STRUCTURE

• DEBT / EQUITY 70/30
• LENDER BANK OF AYUDHYA (BAY)
• TOTAL FACILITY TERM LOAN UP TO US 23 MILLION
• WORKING CAPITAL 25 MILLION BAHT
• INTEREST USD 6 -MTH LIBOR 2.75 P.A
• THB MOR
• TERM 12 YEARS REPAYMENT WITH 2 YEARS GRACE
  PERIOD

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PROJECT FINANCING STRUCTURE

• SCHEME PROJECT FINANCE
• DSCR 1.05 1 FOR TWO CONSECUTIVE 6-MONTH
  PERIODS
• GEF SUPPORTS THIS PROJECT AS A PILOT PROJECT

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PROJECT FINANCING STRUCTURE

• SECURITY FIRST MORTGAGE OVER LAND, BUILDING,
  MACHINERY AND EQUIPMENT
• ASSIGNMENT OF ALL INSURANCE POLICIES
• CONDITIONAL ASSIGNMENT / NOVATION OF
  RIGHTS AND/OR OBLIGATIONS
• ASSIGNMENT OF PERFORMANCE BONDS FROM EPC
  CONTRACTORS
• PLEDGE AND CONDITIONAL ASSIGNMENT OF
  RECEIPT A/C

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HUAY YOD PROJECT(RUBBER WOOD WASTE - FIRED POWER
PLANT)
LOCATION TRUNG PROVINCE FUEL SUPPLY 660 t/d
OF RUBBERWOOD WASTE SUPPLIERS LOCAL
PARTNER AND FROM VICINITY SAWMILLS LHV 9.0
MJ/kg (2,150 kcal/kg) POWER OUTPUT 17 MW (net)
SOLD TO EGAT PLANT SIZE AND TECHNOLOGY IDENTICAL
TO YALA GREEN PROJECT. POSSIBLE TO BE A
REPEAT ORDER.
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