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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
[email protected] 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