Feedstock Supply. An African perspective

Transcription

1 Feedstock Supply. An African perspective Sonia Medina Chief Operating Officer & Partner European Biomass Power Generation Platts 1 October 2012

2 AfriRen snapshot Established in May 2010 Objective: to become the largest biomass producer and trader from West Africa To source sustainably-certified woodchips from unproductive trees from existing plantations To trade on spot or long-term agreements with European utilities (5-year agreement with VERDO for Ghana rubber woochip production in place) Capital injected from existing shareholders is 5.00 million Standard Chartered provided for US$5 million structured trade finance facility to close the first project cycle Potential to replicate Ghana model in 3 other West African countries AfriRen is a leader in its field and market maker

3 Levels of difficulty in developing a feedstock supply project (in Africa)...

4 Biomass supply constraint in Europe for woodchips or pellets only? how demand for woodchips will evolve? Woodchips consumption Local supply still main supplier Will buyers become more interested in suppliers from abroad? Price evolution of woodchip market What are the elements/drivers to define the price structure? Correlations? Young market More volume to see forward prices, hedging, derivatives

5 Trade flows to Japan ATLANTIC TRADE 0.29 INTRA-EUROPEAN TRADE PACIFIC RIM TRADE Million odt of wood chips (2009) 0.28 Biomass demand (million odt) Potential European wood demand for energy* Pellet buyer woodchip buyer Energy buyers are seasonal buyers Long-term projects spot buyers End-users traders Yet, Europe needs (African) imports Belgium Denmark Italy Netherlands Spain United Kingdom Sweden

6 Forest & Chain of Custody UN Global Compact Biomass Sustainability Green Supply Chain

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8 MIGA (World Bank) - Lengthy process (since November 2010) - Everything must be in place - Small Investment Programme supposedly easier - Banks focus in large transactions - No specialization/focus on renewable energy - 3x security over lending

9 - Roads are a private sector matter - Ports have not been upgraded for decades in a growing economy - Infrastructure development falling behind economic growth - Education, health, transportation are all private matters - Government = bureaucracy

10 How are we trying to overcome these challenges?

11 Our current African supplier Biomass is sourced from SIFCA, the first agro-industrial group in West Africa Workforce 21,000+ Turnover (2009) Net result 450 million 27 million 85,000 ton/year 120,000 ton/year 300,000 ton/year Strategic plan to replicate model across SIFCA s plantations

12 GREL Project annual export of 80,000 mtons of rubber tree biomass from Ghana Key Concepts Length of contract Key Figures 8 years Size of plantation 13,000 Ha Felling schedule Port logistics Biomass volume 585 Ha/yr to be felled and replanted Takoradi, less than 80km from plantation 80,000 gmt/year over 8 years Biomass specs Woodchips from 2011 to 2012 Export schedule Quality Specs 4-5 cargoes of 20,000 metric tons per year over a period of 6 months Within EU guidelines 12

13 UTILITY

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16 Export operations out of Takoradi Shipments: VOLUME EXPORTED (GMT) 13-Feb-12 MV Nord London 13, Apr-12 MV Nord Setouchi 12, Jun-12 MV Clipper Trust 17,051 7-Sep-12 MV Sirius 20,211 SUB-TOTAL 63,415 Key loading indicators: Stowage factor: 84cbf Loading rate: 6,500MT/day

17 Africa Renewables Group Key Achievements Key Achievement Harvesting: Description Approx. 800 Ha harvested to date (100 Ha/month) European sales: Exports: Logistics chain: Team: Sustainability certification: Secured 5-year off take agreement with VERDO, a Danish utility owning 200-MW biomass power plant 4 cargoes representing over 63,000 MT of woodchips (Feb to Sept 12) Built logistic chain worth over US$8 million with specialized forestry and logging equipment Built experienced team of 70 people in production, logistics and biomass exports with only 3 expats First African operator to achieve FSC Chain of Custody and Controlled Wood Certification via SGS

18 AfriRen continues to expand...

19 TREL harvesting practice at GREL plantation today

20 Sonia Medina COO Tel: +44 (0) Mob: +44 (0)