By Modupe Gbadeyanka
The Louisiana State Bond Commission has approved the sale of $60 million tax exempt bonds by the Biomass Secure Power’s wholly owned subsidiary, Biomass Power Louisiana.
This was approved on January 19, 2017.
Consequently, the company has engaged the Bank of America Merrill Lynch to sell the bonds on its behalf.
Proceeds of the bond issue will be used to build a new 240,000 tonne/yr, Bio-Coal production facility at the Port of Natchitoches Louisiana.
A 20 year off-take agreement has been confirmed for 200,000 tonnes per year of Bio Coal, which is expected to generate annual sales in excess of $40 million per year. The total annual sales from phase one running at 240,000 tonnes/yr is planned to be in excess of $48 million per year.
Biomass Secure Power Inc. and River Basin Energy are in the process of merging the two companies prior to the closing date of the financing round. Additional information about the merger will be released in the upcoming weeks.
The investment at Natchitoches is phase one of a three phase development program that will increase the plant production capacity to one million tonne per year. River Basin Energy has received a MOU to provide a further 500,000 tonne/year to 2,000,000 tonne/year of Bio-Coal. The MOU will be converted to a binding off-take agreement after trial samples from phase 1 operations have been received and evaluated by the buyer as being of the same quality or better than samples already made available from the RBE reactor.
Bio-coal is a torrefied product used to generate heat and electrical power for residential and industrial purposes. Bio-coal is a sustainable alternate to coal in most circumstances. Bio-Coal has a commercial advantage over whitewood pellets as the energy cost is about the same and the CAPEX requirements to convert an existing plant to bio-coal is significantly lower.
Adedapo Adesanya