LONDON - Blue Sphere Corp. (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 memorandum of understanding to implement an alternative waste treatment clean development mechanism project, with a renewable energy component, in Accra, Ghana.
The Project is the delivery of a solution to utilise waste through conversion into renewable energy and/or the production of compost or reconstituted by products. Blue sphere will identify a technological solution following a site visit in Accra over the next several weeks. Due diligence is underway and depending on the results and recommendations, the project will have the capacity to utilise and convert into energy 300 to 1,000 tonnes of municipal solid waste (“MSW”) on a daily basis.
It is expected that the project will have up to four separate streams of revenue: (i) tipping fee to be paid semi-annually by the Accra municipality per tonne of MSW delivered, (ii) carbon credits generated due to avoided methane emissions, (iii) sale of electricity and (iv) sale of compost and other reconstituted products (e.g., glass, paper, plastic, metal, etc.) from the processed waste. The optimal size of the project depends on a range of factors, predominantly economic, but the Accra Regional Ministry is willing to commit in writing to deliver up to 1,000 tonnes of MSW per day. Due to the availability of low-cost labour, it is envisioned that the plant will not employ automated sorting but will, instead, hire local workers to perform this function. All figures below are in euro.
Blue Sphere will be an investor in the Project and will be a project co-developer. Revenues to Blue Sphere will come from the sale of CERs, tipping fees, sale of electricity and sale of reconstituted materials. It is anticipated that Bluesphere will have a substantial, controlling interest in the project.
“Blue Sphere has found opportunities to utilize our expertise in Accra. We are pleased to announce this memorandum of understanding and, once our due diligence is complete, we will provide further updates. We envision that the annual emission reduction of the Project, assuming 300 tonnes per day, will start at 40,000 annually commencing in 2011 and remain constant throughout the life of the project. At 1,000 tonnes per day, the CER volume is expected to increase to 150,000.” said Shlomi Palas, CEO of Blue Sphere.
Total capital investment required is anticipated to range from $15 million (for a 300 tonne per day project) to $28 million (for a 1,000 tonne per day project). The initial annual revenue is expected to be $3 to $8 million (depending on project size) consisting of tipping fees, CERs, electricity and reconstituted materials. This will allow return of investment in 4-6 years. The investment horizon is 25 – 30 years consisting of three 7 year crediting periods for the CDM aspect of the project and additional years for the operation of the non-CDM aspects of the project.