A Chinese biomass power venture aims to raise up to $100 million for a series of renewable energy power plants that could yield about 1.5 million U.N.-backed carbon offsets a year.
The 250 megawatt venture will be listed on London’s Alternative Investment Market (AIM) within the next few months, a spokesperson for financial services firm GA Group, the project’s lead manager, told Thomson Reuters subsidiary Point Carbon News on Tuesday.
The project is owned by Shenzhen Hanyuan Green Energy Resource Co Ltd.
“The biomass energy venture is a scalable project designed to utilize waste agriculture biomass to produce electricity from five newly constructed 50 megawatt power stations,” GA Group said in a press release on Tuesday.
The venture is seeking to raise $30-100 million in funding, primarily from private European investors, the statement said.
While GA Group will raise the funds, New Zealand-based Environmental Intermediaries and Trading Group (EITG) is responsible for getting the project registered under the U.N.’s clean development mechanism (CDM) and selling the resulting offset credits.
Richard Hayes, director of EITG, told Point Carbon News the project is capable of delivering up to 1.5 million certified emissions reductions (CERs) annually if successfully approved.
“We intend to offer most if not all the CERs in the EU market via a term sheet on a forward contract once we have the financing in place,” he said.
CERs are currently selling in the secondary market in Europe at about 13.15 euros each. Each CER represents a tonne of greenhouse gas emissions.
Hayes said the power plants will use five sources of biomass, including wheat straw, corn stalks, cotton stalks, peanut stalks and soy bean stems.
He said Shenzhen Hanyuan Green Energy Resource Co Ltd. was created especially for the venture. The firm is jointly run by Shenzhen Hanji Investment Consultation Co. Ltd., Korean ECO-Froniter Company and Shenzhen Hanfeng Investment Consultation Co. Ltd., with the registered capital of $10 million.
EITG, a CDM project developer and advisory firm, is currently writing the project design document and faces a race against time in getting the project approved by the United Nations ahead of the end of 2012.
CDM projects in major developing nations approved after that date will not be eligible to supply EU companies with offset credits unless bilateral agreements are made between the EU and national governments.
