40 MW Solar Energy Project Bani, Dominican Republic
A Proposal
Project Presentation
Table of Contents Item No.
Particulars
Page Nos.
1.
Cover Page
Page 1
2.
Table of Contents
2
3.
What is Solar Energy?
3
4.
How much Solar Energy?
4
5.
Radiant Energy
5-6
6.
Advantage and Disadvantage
7
7.
Project Description
8
8.
Milan Farms Survey Plan
9 - 10
9.
Why in Bani? Basic Information
11 - 12
10.
Direct Normal Irradiation/Radiation Map - Annual
13 - 14
11.
Energy Resources
15
12.
Solar Irradiance
16
13.
Sunrise, sunset, dawn and dusk times, table
17
14.
Solar Energy and Surface Meteorology
18
15.
Sun Path Diagram
19 - 20
16.
Challenges and Opportunities
21 - 22
17.
Project Finance Strategy
23 - 25
18.
Consortium Members/Sequence of Events
26-27
19.
References and Appreciations
28
20
Contact US
29
2
2
What is Solar Energy? ď‚— Originates with the
thermonuclear fusion reactions occurring in the sun. ď‚— Represents the entire electromagnetic radiation (visible light, infrared, ultraviolet, x-rays, and radio waves).
2
3
How much Solar Energy? The surface receives about 47% of the total solar energy that reaches the Earth. Only this amount is usable. The Sun is 93 million miles away. The tiny fraction of the Sun’s energy hits the Earth (~a hundredth of a millionth of a percent) is enough to meet all our power needs and more. The sun provides more energy in an hour than the U.S. uses in a year. We call the energy from the sun, Solar Energy.
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4
Radiant Energy Under extreme pressure, and at extremely high temperatures, nuclei of atoms and their electrons can separate, forming plasma. In this extremely high energy state, nuclei can get close enough to each other to fuse. When they fuse, they release tremendous amounts of energy. This is what happens in the sun’s core. The energy produced by fusion can be reabsorbed by other nuclei and rereleased in future fusion reactions. Energy released in the core of the sun can take thousands of years to find its way to the surface of the sun.
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5
Radiant Energy Once the energy has left the sun, it is radiated as electromagnetic radiation toward space at a speed of 300 million meters per second, or 186,000 miles per second. At that speed, the energy needs only 8 minutes to reach the outer atmosphere of the earth 93 million miles away. Once it reaches the earth, the incoming solar radiation, or insulation, is absorbed and reflected. The greenhouse effect, a naturally-occurring phenomenon, allows the energy from the sun to remain trapped near the earth’s surface, keeping the temperature of the earth in a comfortable range at night. Without the greenhouse effect, life on earth would be impossible. 5
6
Advantages All chemical and radioactive polluting byproducts of the thermonuclear reactions remain behind on the sun, while only pure radiant energy reaches the Earth. Energy reaching the earth is incredible. By one calculation, 30 days of sunshine striking the Earth have the energy equivalent of the total of all the planet’s fossil fuels, both used and unused!
Disadvantages Sun does not shine consistently. Solar energy is a diffuse source. To harness it, we must concentrate it into an amount and form that we can use, such as heat and electricity. Addressed by approaching the problem through: 1) collection, 2) conversion, 3) storage.
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40 MW Solar Energy Project Bani, Dominican Republic Project Description Particulars
Description
Project Location
Bani, Dominican Republic
Installed Capacity
40MW
Technology
Photovoltaic/Mono-Crystalline Silicon Panels/Single Axis Trackers/Lithium Ion Storage
Daily Storage Capacity
+/- 20mW
Annual Production
75,000,000 kWh
Off Taker
CDEEE (State Owned Electric Utility Company)
PPA Duration
20 Years
Purchase Price
19.75 US Cents/kWh
Annual Escalation
US Inflation Rate
Project Footprint
+/- 90 Hectares (Lease) Land Owner – Mr. Nagin Rana / Milan Farms, LLC
Distance from Interconnect
Less than 400 Meters
Engineering
American Electronic Technologies, Inc. (NASDAQ:AETI)
Utility Inter-Connect
ABB (NASDAQ:ABB)
Accountant/Legal/Construction
/Federally Registered, Bonded Local Construction Firm
Insurance
Reputable and rated insurance company
Project Cost Total
US$64,400,000.00
Cost/Watt
US$1.61
7
8
Milan Farms Survey Plan in Bani Total Land Area Owned – 1,900 acres (768.91 Hectares) The Proposed Site - 90 Hectares
7
9
Milan Farms Survey Plan in Bani
8
10
Why in Bani?
Bani, Dominican Republic Basic Information Overview: Country: Dominican Republic Continent: Americas Sub-region: Caribbean The city of Bani is the capital of the Peravia province; its residents also know it as the home of poets. It’s only an hour’s drive west of Santo Domingo. The province’s population is relatively small with 169,865 people, and only 61,864 in the Bani metro area. Distance to Santo Domingo – 65 kms. Municipal Districts – 9 Total Land Area – 642.75 sq. km. (248.15 sq. mi.) Latitude: +18.29 (18°17'24"N) Longitude: -70.33 (70°19'48"W) Time zone: UTC-4 hours Local time: 10:56:38 Altitude: ~50 m Energy Production – 1,695 ktoe/year Energy Consumption – 5,855 ktoe/year Feed-In-Tariff by Solar PV – 0.10 USD/kWh 2010 10
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Why in Bani? Bani, Dominican Republic Basic Information (2) KTOE stands for Kilotonne of Oil Equivalent ' toe ' means Tons of Oil Equivalent ktoe is equal to 1000 toe. 1 toe = 41.84 gigajoule The following are the toe of certain fuels. Gasoline 1Tonne = 1.08 toe Diesel Oil 1Tonne =1.01 toe Dual purpose Kerosene (DPK) 1Tonne = 1.04 toe Fuel oil 1Tonne = 0.96 toe Liquefied Petroleum Gas (LPG) 1Tonne = 1.08 toe Coal 1Tonne = 0.62 toe Bagasse 1Tonne = 0.16 toe Fuel Wood 1Tonne = 0.38 toe Charcoal 1Tonne = 0.74 toe Hydro (primary) 1 GWh = 220 toe Electricity 1 GWh = 86 toe The last one gives 86 toe = 10^9 Wh 1k toe = 1000 toe = [1/86]*10^12 Wh 1k toe = 0.011628 * 10^12 Wh 1k toe = 11628 10^6 Wh 1k toe = 11628 M Wh Finally note that MWh is the unit of energy and not power.
MW is the unit of power and MWh is the unit of energy. ktoe is the unit of energy and not power. MWh stands for Megawatt hour and is a measure of energy that is often used to describe an amount of electricity. A typical family home would use approximately 3 to 4 MWh of electricity a year. An MW stands for megawatt and is equivalent to 1,000,000 watts. If the energy production in the Dominican Republic is 1,695 Ktoe/year this is equivalent to 11.6300000000 MWh or 0.97 MW/12 Hours or 354 MW production per year. If the energy consumption is 5,855 Ktoe/year this is equivalent to 58.1500000000 MWh or 4.85 MW/12 Hours or about 1,770 MW consumption per year. MWh is a unit of energy whereas, MW is a unit of power. Energy and power are two words often confusingly interchanged. Energy is the amount of work done, whereas power is the rate of doing work.
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Dominican Republic Direct Normal Irradiation Map
11
13
Dominican Republic Direct Normal Radiation - Annual
12
14
Dominican Republic Energy Resources Resource
Value
Units15
Period
Source
57
1990
NREL
Wind Potential
1,492
Solar Potential
151,187,496
MWh/year
121
2008
NREL
Coal Reserves
Unavailable
Million Short Tons
N/A
2008
EIA
Natural Gas Reserves
0
Cubic Meters (cu m)
185
2010
CIA World Fact Book
Oil Reserves
0
Barrels (bbl)
185
2010
CIA World Fact Book
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Area(km²) Class 3-7 Wind at 50m
Rank
15
Dominican Republic Solar Irradiance Solar Irradiance is a measure of how much solar power you are getting at your location. This irradiance varies throughout the year depending on the seasons. It also varies throughout the day, depending on the position of the sun in the sky, and the weather. Solar insolation is a measure of solar irradiance over of period of time – typically over the period of a single day. This irradiance calculator takes data collated over a 22 year period to provide monthly average insolation figures. This information is then used to calculate the average daily power generation a photovoltaic system will produce in any given month. The DR’s National Energy Commission leads by example using Net Metering to reduce monthly bills. This solution also provides surplus renewable energy to the grid, reducing the country’s total amount of fossil fuel-based energy
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Why in Bani? Bani, Dominican Republic Sunrise, sunset, dawn and dusk times, table Date
Sunrise
Sunset
Length
Today
06:30
18:39
12:09
+1 day
06:30
18:38
12:08
+1 week
06:31
18:33
+2 weeks
06:32
+1 month
Dawn
Dusk
Length
06:08
19:01
12:53
00:01 shorter
06:08
10:00
12:52
00:01 shorter
12:02
00:07 shorter
06:09
18:55
12:46
00:07 shorter
18:27
11:55
00:14 shorter
06:11
18:49
12:38
00:15 shorter
06:36
18:15
11:39
00:30 shorter
06:14
18:38
12:24
00:29 shorter
+2 months
06:50
18:03
11:13
00:56 shorter
06:27
18:27
12:00
00:53 shorter
+3 months
07:07
18:10
11:03
01:06 shorter
06:44
18:33
11:49
01:04 shorter
+6 months
06:45
18:52
12:07
00:02 shorter
06:23
19:14
12:51
00:02 shorter
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Change
Change
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Why in Bani? Bani, Dominican Republic Solar Energy and Surface Meteorology
Note: These data were obtained from the NASA Langley Research Center Atmospheric Science Data Center
Variable
I
II
III
IV
V
VI
VII
VIII
IX
X
XI
XII
Insolation, kWh/m sq./day
3.94
4.56
5.29
5.66
5.58
5.67
5.57
5.30
4.98
4.60
4.10
3.79
Clearness, 0-1
0:51
0:53
0:54
0:54
0:52
0:52
0:52
0:50
0:50
0:51
0:52
0:51
Temperature, deg. C
23.95
23.99
24.38
25.02
25.52
25.80
25.81
25.96
25.88
25.64
25.23
24.47
7.47
7.20
6.93
6.02
6.22
6.73
7.43
6.91
6.09
5.45
6.93
7.28
39
31
34
46
164
152
111
145
138
161
66
34
13.4
10.1
9.9
9.2
11.2
11.5
13.9
14.0
14.0
15.5
14.1
14.3
Wind speed m/s Precipitation, mm Wet days, d
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Why in Bani? Bani, Dominican Republic Sun Path Diagram
13
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Why in Bani? Bani, Dominican Republic Sun Path Diagram
Legend: Gray Color – Darkness Violet Color – Dawn Yellow Color – Sunshine Red Color - Dusk
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Dominican Republic Challenges and Opportunities Solar Energy Project Legal Framework: Energy Profile: A. DR island nation that imports 86% of its combustibles for electric power generation; B. 3% of GDP in 2008 went to subsidize the losses of the grid; C. Frequent blackouts/brownouts; D. Structural problems (Government middle man between private generation and residential use) (Capacity of the grid); E. Lots of illegal connections; F. low collection on bills.
Financial Taking out a loan contributes to the viability of the project. Assume banks allow for a five year debt term at 10% interest. This assumption is supported by the fact that the debt service coverage ratio is greater than one for all cases meaning, the revenue generated by the solar project is great enough to cover the annual debt.
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Law 57-07 passed in May 2007 provides incentives to public and private projects that demonstrate financial, environmental, technical and physical viability. This law expressly encourages the installation and exploitation of pre-approved photovoltaic systems with no restriction on production. Incentives include: A.
Exemption of import duties for all equipment necessary to generate energy from renewable source; B. Exemption of ITBIS for certain equipment expressly listed in the law ; C. 5% reduction on interest on foreign financing on renewable energy projects ; D. A single tax credit of up to 75% on the cost of capital equipment used in pre-approved projects that change to or expand the use of renewable energy in residential, commercial, or industrial establishments. The tax credit is apportioned over a three- year period at the rate of one-third per year
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Dominican Republic Challenges and Opportunities (2) Environmental Meteorological data including average solar insolation for the city of Santo Domingo is provided by Ret Screen[, a Canadian renewable energy program. This data comes from ground monitoring stations and/or from NASA's global satellite/analysis data.
Model Parameters and Sight Data The flow of information begins on the 'Model Parameters' and 'Site Data' tabs. On the Model Parameters tab, the spreadsheet user may input financial parameters (e.g., inflation and financing options), hardware specifications (e.g., efficiencies and costs), and options for the analysis (e.g., whether to assume a pre-existing inverter and battery bank). On the Site Data tab, supply and demand for solar energy are listed for a representative year. Monthly demands are listed in a format as you might find on an energy-bill, while suppy is listed in terms of the available daily solar energy per unit area during each month of a typical year.
Design Criteria The 'Design Criteria' tab lists the target photovoltaic powercapacity (blue cells) for each of five design scenarios. These power-capacities are calculated according to the supply and demand information on the 'Site Data' tab. The scenarios are described by the following table:
Equivalent PV Energy Production
Case
Description
1.
Supply enough energy to meet average annual second tier demand.
average daily 2nd tier energy demand
2.
Supply enough energy to such that second tier energy is never purchased
3 standard deviations above average daily 2nd tier demand
3.
Supply as much energy as possible without ever exceeding demand
3 standard deviations below average daily demand
4.
Supply enough energy to meet average daily demand
average daily demand
5.
Supply enough energy to go off-grid
3 standard deviations above average daily demand
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Project Finance Strategy The development of the 40 MW Solar Energy Project in Bani, Dominican Republic requires three types of financing as follows: 1.
Pre-Development Financing: Funds needed to finance so called “soft cost” is called pre-development financing, It is estimated that of the total project cost of $64,400,000.00 the total pre-development financing needed will be about $1,610,000.00. Of this amount the initial fund requirement is approximately $483,000.00. The balance of $1,127,000.00 will be needed in four (4) equal tranches. The first tranche in the amount of $281,750.00 should be made available for release three (3) months from the date the $483,000.00 is released. Second, third and fourth tranche shall be made available for release every after three (3) months from the first tranche. Pre-development period – 12 months Total amount required - $1,610,000.00 Day One ----------90th day-------------180th day--------------270th day------------360th day $483,000.00 $281,750.00 $281,750.00 $281,250.00 $281,750.00 The project has acquired site control with Mr. Nagin Rana, Owner of Milan Farms, S.R.L., providing the land with a total requirement of about 90 hectares.
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Project Finance Strategy: Continuation (2) 2. Construction Finance: Construction finance means funding needed to construct the project. The project cost in the amount of $64,400,00.00 is divided into two (2) components as follows:
A. Local Component – Funds needed to pay for materials and services locally acquired: Amount needed - $16,100,000.00 Less: Pre-development costs - $ 1,610,000.00 Balance - $14,490,000.00
Item No. A.
Particulars
DIRECT COSTS
Budgetary Cost Estimates $55,706,000.00
A1.
Pre-Development Costs (including government Permits and Licenses)
$1,610,000.00
A2.
Local Component Costs: Materials/Labor Costs
$5,796,000.00
A3.
Foreign Component Costs: Materials/ Equipments/Labor Costs
$48,300,000.00
B.
INDIRECT COSTS
$8,694,000.00
B. Foreign Component – Funds needed to
B1.
$1,738,800.00
import materials and equipments from suppliers and manufacturers overseas:
Overhead and Supervision
B2.
Insurance Premiums and Bank Charges
$5,651,100.00
- $48,300,000.00
B3.
Incidentals
$1,304,100.00
- Two (2) Years
C.
Amount needed Construction Period
NOTE: Land Costs not included in this presentation.
TOTAL PROJECT COSTS
$64,400,000.00
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Project Finance Strategy continuation (3) 3.
Permanent Financing or Mortgage Finance: Construction can be financed in two ways. One way is to use two loans, a construction loan for the period of construction, followed by a permanent loan from another lender, which pays off the construction loan. To finance the construction, the proposal is to secure a combination of equity and debt. The equity portion which will be equivalent to the amount allocated under local component in the amount of $16,100,000.00 will be raised through sales of shares of stocks, via the issuance of Private Placement Memorandum (PPM). On the other hand, the foreign component in the amount of $48,300,000.00 will be raised through a loan via a combination of Export Credit and loan from a bank. A bank in the Dominican Republic that is said to be providing permanent financing for renewable energy is a government bank known as BHD Bank. This bank has a special financing arrangements with some multilateral financing institutions, that makes BHD as conduit in providing funding for renewable energy projects in the Dominican Republic. Moreover, other banks in the Region that has special funding for renewable energy projects are Corporacion Andena de Fomento (CAF) and Central American Bank for Economic Integration.
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Consortium Members Members of the Consortium as of October 21, 2014: 1.
Milan Farms, SRL The company owns about 1,900 acres of land in Bani, Santo Domingo. About 35% of the total land area is planted to Mangoes and Plantain. The website is: www.milanfarmsusa.com
2.
Caribbean Greenhouse, CxA The Owner is a former Minister of Agriculture in the Dominican Republic and recently the Administrator of MERCADOM, a government owned over US$110 Million farmers market facilities, until he resigned last September, 2014 to focus on his own company in Moca, Dominican Republic where the company owns 28,000 square meters of Greenhouses where they raise tomatoes and peppers. Besides this, they own the largest Coffee Mills and Coffee Plantation in the country.
3.
Grupo Cobra, a member company of ACS of Spain The company is the World’s leading Infrastructure and Concessions Developer. A member of the ACS Group, and ranks number one for 2013 by ENR with a revenue of over $42.7 Billion. Grupo Cobra is probably the world’s largest energy development company having done several renewable energy projects all over the world. The website is: www.grupocobra.com.
4.
Global First Financial Partners, Inc. (GFFP) It is a Delaware Company, engaged in the business of project development and project finance. It has been involved with a number of infrastructure and real estate projects in its capacity as financial engineer. The website is: www.globalfirstfinancial.net.
5.
Value Creation-Alternative (VC-A) VC-A, www.vc-alternative.com, is a strategy and corporate advisory company specialized in helping companies develop their business, either organically or through acquisitions. Founded in 2002, the company has developed a worldwide network of more than 1,000 seasoned professionals with more than 45,000 contacts and have collectively advised M&A projects worth in excess of US$100B.
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Sequence of Events Item No.
Activities
1.
Submission of Proposal to the Government under the Build-Operate-and-Own (BOO)
2.
Preparation of Pre-Development works including creation of a Special Purpose Entity (SPE) that will own the Project
3.
Selection and Appointments of Project Development Consultants, engineers and Architectural Firms
4.
Negotiations with Investors/Creditors/Export Credit Agency and other Financing Institutions/Land Owner
5.
Drafting and Executions of Contracts and PPAs with the Government
6.
Bidding and Awarding of Contracts to various Companies
7.
Project Execution
8.
Maintenance and Operation
9.
“Ownership� of the Project to be sold to the Government or to private interest group
Remarks
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References and Appreciations: This “Project Presentation” is intended for presentation to potential investors and strategic partners of Milan Farms. The objective is to develop a 40MW Solar Energy Project in the property owned by Mr. Nagin Rana in Bani, Dominican Republic. A “comprehensive project feasibility studies” will be done as soon as potential participants in this Project have been identified and all the Parties have executed a Memorandum of Understanding (MOU). Moreover, this document was made possible through the support of Mr. Nagin Rana and other partners of Mr. Fernando M. Sopot. Likewise, the author has recognized the importance of reference materials used in this document such as but not limited to NASA Public Information documents, the U.S. Department of Energy’s Solar Development and appropedia.org. This “document” is subject to change without prior notice.
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Contact Us: This Project Presentation is prepared for: Milan Farms, S.R.L. U.S.A. Office: 32 Passaic Street, Garfield, New Jersey 07026 P: 1.201.370.5760 : 1.973.458.0066 W: www.milanfarmsusa.com E: milanfarms@hotmail.com Dominican Republic Office: 28, Residential Artemia, Unit 2B, Las Casicago, Santo Domingo, Dominican Republic P: 1.809.850.7608
Attention: Mr. Nagin Rana Owner
Fernando M. Sopot President
Global First Financial Partners, Inc. 108 Orchard Terrace, Union New Jersey 07083 P: 1.908.463.9417 E: fms@globalfirstfinancial.net W: www.globalfirstfinancial.net
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