Wednesday, April 13, 2011

BUSINESS FOR PARTENERSHIP- MICROHIDRO POWER

BUILDING A MICRO HYDROPOWER PLANT

PROJECT DATA

Project Title
Micro hydropower plants
Location
Romania
Project Nr.
…………..
Sponsor

Created by
PRITA DEVELOPMENT
Nr.
Rev -1-
Date
02/23/10
Starting year
2010
Starting date
05/15/10
Construction period
……………… Months
Income tax rate
10,00 % per year
Tax exempt
5 Years
Depreciation
1 Year
Inflation rate
3,00 % per year
Discount rate
8,00 % per year
Local Currency
RON
Exchange rate
4,20 RON/EUR
Project Currency
EUR All sums in EUR x 1000


OVERVIEW

For Romania, the hydro potential represents an alternative for the sustainable development of the energy sector, taking into account the limited resources in raw materials but also the need to obtain cheaper energy that does not produce greenhouse gas emissions. Considering Romania’s huge potential, the necessity to exploit this potential, our experience in this field and the commercial relationships established so far, we have decided to invest in the production of energy from renewable sources, to implement the result of our research in this field in the famous Romanian Carpathian Arc area and to set up a chain of hydropower and agrotouristic objectives called “Micro hydropower chain in the turbine-cascade generator system”.
The promotion of renewable energy (E-SRE) represents a necessity in this period, an imperative motivated by:
- the environment protection
- the energetic independence growth in imports, through the diversification of energy supply sources and also in the matter of economy and social cohesion.
The Directive 2001/77/CE of the Council and the European Parliament concerning the promotion of renewable energy on the internal market represents the first actual action of the European Union for attaining the greenhouse emission gas reduction obligations for which it has committed by the ratification of the Kyoto Protocol.


OBJECTIVES


- the study of Romania’s hydrologic basin
- establishing the areas in which the future micro hydropower plants and the touristic objectives will be built.
- conducting hydrographic studies to establish the annual average flow of the watercourse and topographic measurements needed for the execution of the construction project for each of the hydropower objectives.
- contracting the Local Authorities to concession / buy the land where the objectives will be built.
- initiating the elaboration of the necessary documentation to obtain the environmental authorization for each of the areas and obtaining the other authorizations from the respective State Authorities, necessary for the implementation and completion of these objectives.
- identifying constructors with international experience in the machinery production, installations and hydro equipments.
- the study of prices of the necessary materials for the construction process of the micro hydropower plants and of the touristic objectives.
- studying the pricing of international producers for machines, equipments and installations and the way in which they can be contracted (pre contracting).

THE BUSINESS IDEA

Implementing this project will imply lots of benefits for the Romanian company by the fact that the energy needed for the harmonious development of the company will be produced from renewable sources, with minimal production costs for a long period of time and will result in the reduction of greenhouse gas.


ADVANTAGES

- Better use of the kinetic power of mountain watercourses for the production of electric energy from renewable sources
- Better use of the touristic potential, promoting the mountain routes and the local attractions and also the bio-zoological resources and the specific products.
- The electrification of the farthest and disadvantaged inhabited areas from the Carpathian Arc.
- Creating jobs in these disadvantaged regions.
- Increasing the electric energy production in Romania, with lower costs in constructions, maintenance and production.
- Maintaining the ecologic equilibrium through the construction of micro hydropower plants on the banks of watercourses, without modifying the water flow and without building any locks or barriers.
- Using both banks of the watercourse for setting up the objectives for which the level difference and the water flow are important.
- Expanding the electric energy distribution area through the construction of new networks, in partnership with important distributors.
- Future diminution of the buying price of electric energy for the industrial and civil consumers.


ENTREPRENEURS

Company Name
Organigram
Management – The Administrative Council represented by the President (the administrator) and the Chiefs of Departments.
Departments:
- Marketing Department
- Financial-Accounting Department
- Technical-Design Department
- Contracting- Supply Department
- Work Protection Department
- Legal Department
- Maintenance-Exploitation Department

All these departments will be created by hiring personnel with a high degree of specialization and with experience in the domain.

MARKETPLACE

Taking into account the need for energy supply of homestead consumers but also of the industrial ones and the fact that the natural gas and fossil fuels resources are almost over, the setting up of such objectives is self-imposed. This type of objectives would produce the necessary electric energy from renewable sources and this would protect the environment through the reduction of the harmful greenhouse gas emissions. It has been demonstrated that the hydroenergetic potential has been used in several productive activities, resulting in huge benefits for the companies. Nowadays, we see clearly that this huge potential is one of the worldwide inexhaustible resources that can save humanity by insuring the electric energy supply and by creating an unpolluted environment.
The competition in the energy production field is obvious by the fact that the producers that use natural resources succeed in insuring 90% of the world necessary electric energy, but in the future, when those resources will be over, the humanity will concentrate on the production of energy from renewable resources.
Therefore, this competition diminishes and those who invest in such objectives will become the future large producers.

TECHNICAL DATA
The realization of the hydropower objectives needs:
- CROSSFLOW (banki) turbines
- CO’CLEA (gravitational) turbines
- Hydraulic wheels

FUNCTIONNING CONDITIONS

CHEMP’s role is to adjust the raw/untreated water flow and to add value to its potential by injecting the energy produced into the SEN. CHEMP will by equipped form the point of view of the automation, protections and distance control so that it will function entirely automatic, only by periodic surveillance. The automation system with a programmable automat (PLC) for micro hydroaggregate includes all the informational and control levels to insure the safe power functioning.
The command system allows distance communication by means of the SCADA system (or GSM modem), with the possibility of distance transmission of signals and commands: water level, currents, pressure, active energy, reactive energy, temperatures etc.

CO’CLEA turbine – ADVANTAGES

- It does not need adjustments – the CO’CLEA turbine auto-adapts at the network frequency and water flow.
- Its efficiency is higher compared with the hydraulic wheels or other turbines and it does not considerably modify in case of flow variations.
- It is a rough construction; it is wear and tear resistant, without functioning problems.
- It does not imply large civil constructions or underground constructions
- It does not need cleanup or permanent maintenance.
- It does not disturb the fauna or the fish flows.
- Automatic adjustment and functioning.

THE PRODUCER DELIVERS THE FOLLOWING MACHINES, INSTALLATIONS, EQUIPMENTS AND MATERIALS

Turbine and accessories
- CO’CLEA turbine
- Speed: 96/min, max.speed 466/min.
- speed detection sensors
Speed Multiplier/ Couplers
- Frontal speed multiplier with oil cooler
- Temperature sensor 1xPT100
- Multiplier anchor bolts
- Couplers between the turbine, the multiplier and the generator.
- Fenders for the rotating parts
- Oil for primary filling
Generator
- Sincron generator, nominal power PN= 450 kVA
- Nominal speed 1000/min., max.speed 2376/min. (time = 15 min.)
- Frequency 50 Hz, power factor 1,0, tension 400V
- Protection class IP 23, cooling IC 01, Isolation class H/F
- Sensors for temperature detection
- Generator anchor screws
Command and automation system


CONSTRUCTIONS AND THE FUNCTIONNING PRINCIPLE OF THE HYDROENERGETIC OBJECTIV IN CASCADE

For the functioning of each hydroenergetic objective the following steps are necessary:
A) Setting up an upstream catchment outlet without using locks or barriers and equipping it with automatic protection and cleaning systems.
B) One or both shores will be equipped with aqueducts through which the water will reach the turbine.
C) Putting up the construction in which the turbine-generator ensemble, the electric equipments and the control-monitoring system
D) The evacuated water from the first turbine will be directed to the second turbine by means of adduction pipes and stilling basins, taking into account the level difference, necessary for an optimal functioning.
E) This principle is repeated until the difference in level is no longer significant and the water is directed to the river bed, thus, a hydroenergetic objective can contain a large number of turbine-generator ensembles.
F) The power resulting from this type of hydro objective is given by the total power of the turbine-generators and can reach aprox.10 Mw/h.
G) There can be many hydro objectives on one watercourse in case the water flow and the level difference are considerable.
H) For each objective the construction implies:
- the adduction channel
- the stilling basin
- the adduction pipe
- pressure and flow adjustment valves
- the building hosting the turbine-generator, the electric equipments, transforming section, maintenance and repairs workshop.
- stilling channel and water transportation to the next turbine
- administrative office (space for offices and for the touristic activity)

FUNCTIONING PRINCIPLE SCHEME

1) Water adduction channel
2) Forced velocity channel, the area for setting up the upstream hydraulic wheel
3) Adduction pipe with the pressure/retaining valve
4) Cross flow turbine building
5) Stilling basin
6) CO’CLEA turbine
7) Stilling basin
8) Forced velocity channel, the area for setting up the downstream hydraulic wheel
9) Discharge channel


A hydropower objective is composed of 2 cross flow turbine-generators (2X760 = 1520 kw/h), 2 CO’CLEA turbine-generators (350x2 = 700 kw/h) and 10 hydraulic wheel turbine-generators (45x10=450 kw/h). The resulting power is 2670kw/h = 2,67 Mw/h

PROJECT IMPLEMENTATION

By building 25 hydropower objectives, the resulting power will be of 6675 kw/h = 66,75 Mw/h
The 25 micro hydropower plants can be built in a rhythm of 5-7 objectives per year.
Taking into account all the factors (authorizations, financing, design, constructions, transport, equipment, installations, machines setup technologic tests,) we have concluded that in the first year, a number of 2-3 objectives can be set up. The following years will mean 5-7 objectives per year. After acquitting the financing from the obtained benefit, this process will continue.

Annual production and the outcome value for selling energy and green cards
No. 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Hydropower plants 0 2 7 12 17 22 27 29 31 33
Actual production 0 32.040kw /year 112.140 kw/year 192.240 kw/year 272.340 kw/year 352.440 kw/year 432.540 kw/year 464.580 kw/year 496.620 kw/year 528.660 kw/year
Income – selling of electric energy 0 1,442 mil.euro 5,046 mil.euro 8,650 mil euro 12,255 mil.euro 15,869 mil.euro 19,464 mil.euro 20,906 mil.euro 22.348 mil euro 23,790 mil euro
Income – selling green certif.. 0 1,762 mil euro 6,168 mil euro 10,573 mil euro 14,979 mil euro 19,384 mil euro 23,790 mil euro 25,552 mil eur 27,314 mil euro 29,076 mil euro
TOTAL 0 3,204 mil euro 11,214 mil euro 19,223 mil euro 27,234 mil euro 35,244 mil euro 43,254 mil euro 46,458 mil euro 49,662 mil euro 52,866 mil euro


The average price for the electric energy = 45 EUR/Mw
The average price for Green Certif. = 55 EUR/GC


WORK FORCE, EMPLOYEES

No. Job name Qualification Net salary/month
(EUR) Gross salary/month
(EUR) Annual Spending/ retributions (EUR)
1 Administrator Higher Education 1500 2200 26400
2 Marketing Dir. Higher Education 1000 1500 18000
3 Financial Dep.Dir Higher Education 1000 1500 18000
4 Technical Dep.Dir Higher Education 1000 1500 18000
5 Contracting Dep.Dir Higher Education 1000 1500 18000
6 Work Prot.Dep.Dir Higher Education 1000 1500 18000
7 Legal Depart.Dir Higher Education 1000 1500 18000
8 Export Depart.Dir Higher Education 1000 1500 18000
9 Economist Higher Education 800 1200 14400
10 Accountant High-school studies 600 1000 12000
11 Constr.Engineer Higher Education 1000 1500 18000
12 Design Engineer Higher Education 1000 1500 18000
13 Secretary Higher Education 600 1000 12000
14 Electronics Tech. Higher Education 800 1200 14400
15 Electrician High-school, authorization 600 1000 12000
16 Electrician High-school, author. 600 1000 12000
17 TOTAL 373 000





SETTING UP A TOURISTIC OBJECTIVE

The touristic objective is composed of:
- 10 rooms with 2 beds, antechamber, bathroom, balcony
- Equipped kitchen
- Day bar (in the reception area)
- 40 places restaurant
- Recreation, divertissement room (well-equipped)
- Gym with cloakroom, sauna, bathrooms and massage
- Small pool, outside bar
- Auxiliary building for the acquisition, processing, packing, depositing and distribution
- alimenting installation, water purification.


INVESTMENT VALUE – TOURISTIC OBJECTIVES

No. Name Value Total value for 25 objectives
1 Agrotourism building 300 000 EUR 7 000 000 EUR
2 Annex building 170 000 EUR 4 250 000 EUR
3 Fish growth basins 400 000 EUR 10 000 000 EUR
4 Reproduction laboratory 150 000 EUR 3 750 000 EUR
5 Recreation complex 200 000 EUR 5 000 000 EUR
6 Furniture, equipment 150 000 EUR 3 750 000 EUR
7 Access roads 420 000 EUR 10 500 000 EUR
8 TOTAL 1 770 000 EUR 44 250 000 EUR

AVERAGE INCOME – TOURISTIC & PRODUCTIVE ACTIVITIES

No. Activity name Annual income value
1 Agrotouristic activity 170 000 EUR
2 Fish growth (sale price = 5 EUR/kilogram) 400 000 EUR
3 Animal, birds growth 100 000 EUR
4 Packing, distribution, depositing activities 175 000 EUR
TOTAL 845 000 EUR



COSTS FOR A SINGLE HYDROPOWER PLANT OBJECTIVE AND THE TOURISTIC OBJECTIVE
No. Name Unit value (EUR) Total value (EUR)
1 Implementation, authorizations 11 000 11 000
2 Design 6 000 6000
3 Hydrographic studies 5 000 5 000
4 Topographic, geodetic studies 12 000 12 000
5 Water catchment outlet 2 500 2 500
6 Adduction channel excavation 9 000 9 000
7 Catchment outlet protection 4 500 4 500
8 Adduction channel 4x4x150 m 24 000 24 000
9 Forced velocity channel 2x1x25 m 5 000 5 000
10 Stilling basin 2 400 2 400
11 Pipe connection outlet 1 500 1 500
12 Pipe ad.D=2,5 m, L=15 m 17 000 17 000
13 Building for 2 cross flow turbines 44 000 44 000
14 Cross flow turbine kit 556 000 556 000
15 Stilling basin 2 400 2 400
16 Building for 2 CO’CLEA turbine 35 000 35 000
17 Construction for turbine placement 8 000 8 000
18 CO’CLEA turbine kit 356 000 356 000
19 Stilling basin 2 400 2 400
20 Forced velocity channel 5 000 5 000
21 Hydraulic wheels kit 76 500 76 500
22 Discharge channel 3 500 3 500
23 Necessary land value (4 ha) 100 000 100 000
24 Agrotourism construction 500 sqm 300 000 300 000
25 Annex constructions 250 sqm 170 000 170 000
26 Trout growth basins 400 000 400 000
27 Reproduction, processing laboratory 150 000 150 000
28 Recreation complex 200 000 200 000
29 Furniture, equipment, machinery 150 000 150 000
30 Roads, alleys 420 000 420 000
TOTAL 4 287 200
31 Unpredictable spending 10% 430 000
TOTAL FOR 1 PROJECT 4 717 200


FINANCING REFUNDING GRAPHIC

No. Years Income EUR Refund EUR Interest rate
1 2010 0 0
2 2011 2 880 000 2 000 000
3 2012 10 090 000 10 000 000
4 2013 17 300 000 14 418 571
5 2014 24 510 000 14 418 571
6 2015 31 720 000 14 418 571
7 2016 38 930 000 14 418 571
8 2017 41 810 000 14 418 571
9 2018 44 700 000 14 418 571
10 2019 47 580 000 14 418 571
11 TOTAL 117 930 000 EUR


We are thinking about the future of the humanity, saving and protecting the blue planet – the Earth!

BUSINESS PROJECT FOR PARTENERSHIP

ACQUISITION, PRESORTING, PACKING AND DEPOSITING/SELLING CENTER FOR FRUITS AND VEGETABLES
1. Objectives
Our purpose is to become the first logistic platform specialized in collecting and selling in hypermarkets seasonal agricultural products, made in Romania.
Our objective is to introduce fresh Romanian products on the large stores’ shelves. We are all familiar with the idea that ripe fruits and vegetables are tastier than those reaped prematurely and ripen inside deposits or silos. Products will be sold under the brand PRODROM(Romanian Products) and will have a sufficiently short shelf-life – as we will insure our products’ freshness. Products that remain unsold after that period expires will be taken and transformed into cans, that will be sold out-season under the same brand.
2. Project Description
2.1 The activity will be logistics. Contracts will be signed with agreed agricultural producers for estimated quantities according to clear contractual needs. These products will be taken into a deposit where they will be prepared for selling: sorted, packed in adequate quantities for consumption and delivered according to a contractual relationship with the wholesalers, store chains. The products will be packed and labeled – in this way, the risk for these products to be mixed with others from the store they end up in, is eliminated.
2.2 Investment Description
- Logistic software and hardware infrastructure (computers, barcode readers, security system etc.)
- Construction (approx.1000 sqm) organized so that it can insure the specialized compartments for acquisition, presorting, packaging, depositing and delivery.
A special compartment for optimum depositing climate conditions is needed.
To adapt the shed and obtain authorizations we will acquire a used water purification system.
- Labeling, packaging, washing machines, etc.
2.3 Suppliers, Clients
Suppliers will be agreed with at the time contracts with supermarkets are signed. Products are bought according to the contracted quantities so that the optimum flow in terms of acquisition, packaging and delivery is insured. Products will be paid for at delivery and the transport will be our responsibility. These conditions will help us gain a strong position when negotiating prices with the producers.
Clients: hypermarkets. The delivery process will be negotiated, depending on the estimated quantity, directly to the market or to the chain’s logistic platform.
2.4 The Price and the Promoting Strategy
The prices will be contracted, at acquisition, at the average level of the year before, estimated so that they insure the producers’ interest.
2.5 Staff
- Manager : also responsible for selling the products
- Operation Manager : responsible for insuring the logistic resources (Transportation, package supply and expenditures)
- Executive Key Accountant – in direct relationship with the buyer
- 2 agronomists, responsible with taking over the products and the relationship with the suppliers.
- 10 unskilled workers for the deposit labor.
3. Project Duration and Main Stages:
The project will start in 2011 and the first products will be sold in 2012
Stage 1 – technical documentation completion, feasibility study, business plan – 45 days
Stage 2 – construction project, authorizations and approvals, financing documentation elaboration – 75 days
Stage 3 - a. construction and logistic infrastructure execution – 120 days
b. Acquisitions and installation of technical equipments, installations, utilities – 120 days
the a. and b. sub stages are parallel so the necessary period of time for Stage 3 is 120 days.
Stage 4 – methodological working system completion, staff training, others – 60 days
Project execution time: 300 days.
4. Estimated Investment Cost
4.1 Shed (administration office, acquisition center, packing shed, deposit) = 420 000 euro
4.2 Installations (associated ), logistic infrastructure, necessary equipment = 250 000 euro
4.3 Software, licenses, approvals, specialized trainings, technical consultancy = 150 000 euro
4.4 Administrative costs for 1 year (salaries, transportation, marketing, promotion, sales) = 200 000 euro
4.5 Working Capital (crediting, financing, product acquisition) = 500 000 euro

TOTAL PROJECT COST = 1 520 000 euro
(The working capital does not represent a cost, it is a hedge for the acquisition costs and it is covered by the products’ sale with our own trade markup)
5. Turnover (estimated for 12 months of activity) = 7 000 000 euro
Annual profit rate = 15%
Annual gross profit = 1 050 000 euro
Acquisition/ packing/delivery capacity = 20 tons per day (minimum)
Trade markup (packing, transportation - included) = 50%



6. Financing will be:
A. Private investment,
B. Bank credit line,

LETTER OF INTENT FOR INVESTMENT OR PARTENRSHIPS

PRITAGROUP began its activity in 1998 and, over the time, it has
expanded its activity in the following fields: production of packages,
constructions (PRITA Ltd), thermal and electrical installations (Eco Technology
Development Ltd), security and protection services (Scorpion Guard Ltd). In the
last 4 years, our group also put the bases of a new activity segment in the
business and management consultancy services field (Prita Development Ltd.)
Therefore, we are capable of offering professional services in the market fields
covered by our group of companies and we would be honored to participate in a
project development in Romania, with your participation. In addition, we mention
that we are able to offer the necessary technical support and lobby for every
Romanian authority whose agreement would be needed for covering your interests
in Romania.
The main reason why I send you this letter is to give you an idea of the items that we have and to express my interest in a potential collaboration with your company, in the project that you intent to implement in Romania.
Our company acquired a great track record and our services have always met the standards that are set by our clients. As an area of expertise we can provide consultancy as follows:
-a detailed study regarding the potential of the area
-the necessary quantity of waste, to be able to develop this business
-supporting documents and authorizations for your development in the area
-lobby in getting official approvals and authorizations, contact and connection with the local authorities
-connection and access to the local electrical/gasoline distribution network
-the necessary sqm to develop the factory and warehouse
-well trained and specialized personnel to assist you in your activity in Romania

To be able to design a Business Plan and to proceed with a first step, please let me know more details about the project you intent to implement and develop in Romania and when would you like to start.
I would like to thank you for the time that you allotted to read this letter. I am looking forward to hear from you soon. If you have any question please feel free to call me.

PRITA DEVELOPMENT Ltd.
CALEA CALARASI 132-030628 BUKAREST
Fax: +40213201130/Tel: +314393095
Mobil: +40760686472/+40771053920
BEER-SHEVA 84861 ISRAEL
Tel: +972-86404280 Mobil : +972-528767351
e-mail: office@prita.ro/web: http://www.prita.ro

CDM/ CER

Prita Development and Biosphere Capital form a partnership with the purpose of offering consultancy services and application strategies for projects in the renewable energy field, emmisions reductions strategies and technologies to save energy, reduce costs and promote sustainable development.
Biosphere Capital is an international advisory and trading company in the areas of clean and renewable energy, specializing in Clean Development Mechanism (CDM) project development and emissions reduction technologies. We help companies and organizations apply emissions reductions strategies and technologies to save energy, reduce costs and promote sustainable development. We also provide a variety of traditional financial services.
Our global team consists of business and finance professionals, scientists and engineers. Our experience comprises: energy efficiency and renewable energy and low emissions technologies and strategy, CDM project development (PIN, PDD and other documentation including methodologies and programmatic CDM), carbon asset management (Emissions Reductions Purchase Agreements, CER/VER trades), renewable energy project finance and management, finance from startup to IPO, structured products, leasing, M&A, various kinds of analysis.
CDM/JI Project Development Biosphere Capital is a CDM project developer. We can help you from initial assessment, through project development (planning, finance, documentation, registration, validation, verification) to emissions credit issue and sales. We have experience with a large number of small scale methodologies, methodology development, and have recently initiated programmatic CDM projects in South East Asian countries.
Our CDM team operates out of Singapore, where we work with consultants from India, Germany, France, Portugal, and UK. Between them, our team members have completed dozens of CDM projects and have experience with a wide range of methodologies. Singaporean CDM development costs may qualify for up to 50% subsidies from the National Environment Agency. Biosphere Capital enjoys relationships with CER buyers who, in some cases, will cover some or all of CDM project registrations costs (Biosphere Capital’s fee, DOE and UNFCCC charges). Financial Services Biosphere Capital does capital raising and project finance for renewable energy projects. Our recent experience includes a 100MW solar thermal installation, a wind turbine manufacturer, and biodiesel production applications. We also help micro caps, small caps and middle market companies in all sectors raise capital in a variety of ways. We provide introductions to private equity, venture capital and specialist funds. Biosphere Capital will follow through the transaction execution, including participation in the due diligence process and investor dialogue.
PRITA DEVELOPMENT Ltd.
132, Calea Calarasi Street, Bucharest, RO
Phone: 0040 31 439 30 95/ 0040 771 053 920
We can provide expert advice and assistance with project finance cashflow analysis, optimization and restructuring of structured finance transactions. We build and maintain Excel-based financial models of project finance transactions, providing a "plug-in" resource for project sponsors or banks.
For capital markets transactions, Biosphere Capital can oversee financial analysis, form underwriter’s consortia, assist in drafting sessions, road-show presentations and capital commitment processes. We assist medium-sized companies achieve initial exposure to primary markets. Our wide-ranging experience of financial operations in Europe, USA, the Middle East and Asia allows us to bring creativity and an international perspective to your project.
Regarding the procedure for CDM projects, there are two options:
1. Project owner pays all CDM fees and gets maximum benefit when CERs are sold. The CDM fees and transaction costs are up to euro100-150k when all travel and auditing is included. There are two rounds of audits by UNFCCC auditors. Of course there is a small but non-zero risk that a CDM project may fail to generate revenue for a number of reasons, so, many project developers prefer to avoid this risk. CER revenue may not occur for two years.
2. CER buyer advances CER fees and transaction costs; i.e. the CER buyer assumes the CDM risk. In this case the project owner must sign an Emissions Reductions Purchase Agreement (ERPA) with the buyer at the start of the project. The buyer will recover the transaction costs and also have the right to buy the CERs at a discount to the prevailing spot price when the CERs are issued. The amount of the discount depends on the risk that the buyer perceives the project to have.
We are doing about 40 CDM projects and only 3 use option 1.
We would be honored to offer you more details, if you consider out offer interesting. Do not hesitate to contact us!
Bulintis Iulian Laci Ples
Prita Development Biosphere Capital