May 12 2010
Blue Sphere Corporation (OTCBB: BLSP) (the "Company" or “Blue Sphere”), a company in the Cleantech sector as an Emission Reduction project integrator, is pleased to announce that it has signed a Term Sheet to implement clean development mechanism projects at two landfill sites in Uzbekistan to destroy waste methane gas and to produce compost.
The Company has an exclusivity term until June 15, 2010 to conduct due diligence, negotiate contracts and arrange financing.
The projects would involve the construction and installation of a flaring system at two closed landfill sites with an option of power generation, subject to economic factors. The landfill sites were closed in 2004 and are projected to continue to create and emit methane until 2024.
This project is already very advanced with both letters of approval and PDDs (Project Design Documents – a significant step) having been obtained for both the landfill gas and the compost components of the projects. The Project’s CERs have been sold forward at €12.50 per CER through 2012 to Green Hercules Trading Limited, an affiliate of Cargill and other buyers have expressed an interest in purchasing the Project’s CERs through 2020.
At the landfills, there will be composting of Municipal Solid Waste (“MSW”) in aerobic conditions. The compost is and will continue to be sold for use as fertiliser. The maintenance cost of the project will be financed by revenues generated from the sale of fertilizer. The landfills generate approximately 25 tonnes of compost per day.
The next step is to submit the projects for validation and then for registration to the Executive Board of the Clean Development Mechanism (“CDM”). A validator has been selected and a price quote obtained.
The annual estimated Certified Emission Reductions (“CER”) for the landfills is 135,000 CER’s per year. The CER’s expect to start in 2011 and go through until 2024. Of this amount, Blue Sphere expects to net 855,000 CERs.
The total gross income to Blue Sphere over the 21 year life of the project based on 135,000 CER’s per year is estimated by management at $18 MM USD, calculated at current and escalating CER prices.
The total investment for the projects is estimated at $5.1 Million USD, not including costs of a power generation system.
“We are very pleased to announce the potential to take over a project that is already very close to commencing and that already has a signed contract with a buyer for the CER’s. President Obama has made emission reduction a key component of his cap and trade program and companies producing a negative impact on the environment are purchasing carbon credits to offset their impact. We have the projects to minimize emission reduction and as this particular project demonstrates, a large company has already purchased the credits even before operations have commenced,” said Shlomi Palas, CEO of Blue Sphere Corporate.
Source: http://www.bluespherecorporate.com/