capital expansion of cdm landfill gas flaring and electricity generation

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Capital Expansion of CDM Landfill Gas Flaring and Electricity Generation

William Ko, BA (Oxon)Director

PT Gikoko Kogyo Indonesia

May 27th, 2009

gikoko@gikoko.co.id www.gikoko.co.id

TBLI Conference ASIA 2009 in Yokohama

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Summary of Content

• Gikoko

• LFGTE Business Model & Financial Projection

• Investor Participation

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Gikoko 宜興行 • “Easy to develop & grow” • 100% Family Owned and Managed• Established in 1936 in Japan• Exporting Japanese Capital Equipment

to Indonesia since 1960’s• Business Ventures in Indonesia since

1970’s• Metal Fabricator since 1985• EPC Contractor in Biomass

Combustion Technology since 2001

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Certified Qualification and Best Practice

• ISO 9001• OHSAS 18001• ASME “S” “U” Stamps - Power Boiler and

Vessels; “R” and “NB” - Alteration and Repair

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Signature ProjectBiomass Power plant 4MWe. UNFCCC no.1635

US$ 6million Gikoko EPC contractor

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Gikoko 宜興行 • Project Entity – 4 CDM LFG

Methane Abatement Projects since 2007

• …. 2010 and beyond…

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Market Leader; Gikoko Reference LFG Abatement Projects

TPA Batu Layang, Pontianak

TPA Sumur Batu, Bekasi

TPA Sukawinatan, Palembang

TPA Tamangapa, Makassar

Bekasi

Pontianak

PalembangMakassar

CO2e/yr ERPA Buyer

40,000 200,000 IBRD

63,000 250,000 IBRD

44,000 140,000 ADB

57,000 200,000 IBRD

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Trusts and Recognitions• Due diligence with ADB, WB for financial, social and

environment for obtaining ERPA

• ADB, WB providing quasi-equity (Upfront Payment)

• Long Term Concessions from four Municipalities

• Central Government (Public Works ） providing additional funding for Landfill improvement

• APFED Ryutaro Hashimoto Silver Prize 2008 • Ernst & Young Entrepreneur of the Year Finalist 2008

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Environment Minister attended the opening ceremony of Bekasi Landfill CDM

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Hot, moist tropical condition, coupled with high organic contents are ideal for LFG generation

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LFG Contained, Collected and Destroyed(Bekasi landfill)

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Gikoko 宜興行

• …. 2010 and beyond…

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LFGTE Business Model and Financial Projection

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Target Project• Medium Scale Landfill Project in tender

process • Project Cost US$12million • Preliminary estimate of Carbon revenue

200,000ton CO2e /year and 4MW electrical output

• Annual surplus cash generation of US$2million

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Gas Engine

Flaring

Landfill

DemisterFan

Monitoring

Electricity Supply

LFG Flow

Community Development Landfill Management

CH4

CH4

LFG to Energy 4MWe Power Plant

Power & carbon income

streams

4 MW

Power meter

Power meter

Flow meter

Flow meter

ExcessCH4

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LFGTE Plus CERs Generates US$0.11/kWh

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Local MunicipalGovernment

GikokoBOOProject Developer

UNFCCC process

Month:1 13 16 28

$$$$ Electricity Generation off take sales $$$

Flare Fabrication

Concession Award

6

Construction Cell

$$$Verification for CER$$Validation

DNA Approval

Registration

LFGTE 4MWe Timeline for Investment to Revenue

Gas Engine Installation

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Risks Mitigated• Feedstock Delivery

Municipality

• Gas Generation In-house landfill management know-how

• Power Generation Favorable Government Energy Policy

• Dual Income Stream

PPA = State Electricity Company (PLN) ERPA = World Bank, ADB

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Scalability

• Gikoko is currently bidding in one tender and in discussion with another municipality

• Over 90 municipalities in Indonesia

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Investor Participation

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Leveraging on Success• LFG Concessions Winner

• CDM Registration

• Plant construction and operation ofLFG flare/methane capture and abatement

• Quasi-equity (upfront payment) from ADB/WB as investment capital

• Collateralized Loan from Commercial Bank PPA…

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The Financial Gap• Up to US$5 million per project at the time

concession won

• Commitment (Letters of Intent) from investors NOW

• Financial Structures for discussion

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2010 and beyond…

Leverage our expertise in CDM Landfill Projects to become a major renewable energy power utility company

Thank you