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Biomass heating production plant
100% Financiado

100%
Faltan:0.00€
Tasa de interés:21%
Período:24 meses
Objetivo: 950 000€
Abre: 2019/09/26
Vence: 2019/10/07
Categoría: Specialized
Ubicación: Riga, Latvia
Inversiones: 1758

 

Summary


An operational thermal power production plant is planning to raise capital to acquire wood chips for the following heating season, and to partly refinance short-term liabilities and shareholders debt. Energy production plant has a total energy out-put of 15 MWh and it is connected to district heating system of Riga.
District heating system in Riga is owned and managed by municipality owned operator JSC “Rigas Siltums” which buys thermal power from independent energy producers. There are only seven energy production plants in Riga.
The management team is experienced in energy sector – manages previously mentioned biomass boilerhouse, which is one of the seven thermal power production plants in Riga, is engaged in development of another biomass boilerhouse in Riga, and manages/consults several other energy production plants in Latvia.
Business valuation according to certified appraisal – EUR 11 660 000,00.
Current investment opportunity offers CROWDESTOR investors to make a loan with 21% annual interest rate.
Minimum target to be raised in CROWDESTOR platform is EUR 600 000,00 and the maximum target is EUR 950 000.00.
 

Loan

Minimum target: EUR 600 000,00.
Maximum target: EUR 950 000,00.
Loan term: 24 months.
Interest rate: 21.00% per annum.
Interest payments: For first 12 month interest payments are capitalized and paid in bullet payment together with the Loan principal payment. After first full year, interest payments are paid monthly.
Loan repayment: In full at the end of the Loan Term.
Security:

    • Guarantee by the Borrower

 

    • Guarantee by the operator of boiler house

 

  • BuyBack guarantee of the Crowdestor Buyback Fund


 
Remember, interest rate payments start calculating from the day you make your investment!
 

Project


Biomass boiler house with a capacity of 15 MW was commissioned and put in operations in 26th April, 2018. Object is located in Riga, Ganibu dambis 40B. Technology includes a water heating boiler with nominal output 12MW and a flue gas condenser which increase energy output in a range of 14 MW and 15 MW, depending on humidity of wood chips and daytime temperature.
Business concept – 100% of thermal power will be sold to district heating operator in Riga city AS «Rīgas Siltums».
 

Thermal power market in Riga


The buyer of thermal power – municipality and government owned  district heating operator AS «Rigas Siltums». Total heat demand in Riga is  ~ 2 500 000 MWh pey year.
Demand for thermal power in Riga is 24/7/365.
Our forecasted max annual production is 80 000 - 100 000 MWh which is only 4.0% from total  demand.
Thermal energy is sold to AS «Rigas Siltums». As the major part of thermal energy is purchased from large cogeneration plants owned by the State energy company AS Latvenergo, which are considered as having a dominant role in energy market, and its thermal power price is public and regulated by The Public Utilities Commission. Strategy for Borrower to give a price of 1-10% lower than AS Latvenergo depending on season.
As thermal power market in Riga is a subject of supervision by Public Utility Commission and Competition Authority, thermal power sales agreements with district heating operator “Rigas Siltums” are identical for all 7 energy companies.
The heat supply system in the summer period from end of april till beginning of october is united and all 7 operational energy producers are competitors. During the heating period when heat demand increases even more than 10 times, two separate heating zones are created by district heating operator - TEC-1 and TEC-2 heat supply zones.
TEC-1 heating zone - there are two energy producers in this zone - Eco Energy Riga and  Latvenergo TEC-1.  Third energy production plant currently is being developed by SIA “Powerhouse Sarkandaugava”.
TEC-2 heating zone - there are 5 energy producers in this zone - Juglas Jauda, Energia Verde, Rīgas Enerģija, Rīgas BioEnerģija un Latvenergo TEC-2.*
“Sarkandaugava Powerhouse” boiler house is being developed in the heating zone TEC-1, where is less competition.
*Information from the Competition Council Case No. 3114/09/05/1.
 

The 7 competitors in Riga


 

Company Electrical out-put Thermal power out-put Technology Zone where object is located  
Latvenergo TEC-1 144 490 Natural gas cogeneration and natural gas boiler hous TEC-1  
Eco Energy Riga 15 Biomass boilerhouse TEC-1  
Powerhouse Sarkandaugava (development stage, commissioning in 2021) 30 Biomass boilerhouse TEC-1  
Rīgas BioEnerģija 48 Biomass boiler house TEC-2  
Rīgas Enerģija 4 20 Biomass cogeneration TEC-2  
Juglas Jauda 12 15 + 8 Natural gas cogeneration and biomass boiler house TEC-2  
Energia Verde 4 20 Biomass cogeneration TEC-2  
Latvenergo TEC-2 832 1124 Natural gas cogeneration and natural gas boiler house TEC-2  


 

Technical details


Austrian technology - “Kohlbach” K12-12000 HW furnace and water heating three-step boiler with a capacity of 12 MW is installed.
The boiler house can ensure a continuous heat production 24/7 during all year. System is connected to the heat exchanger of JSC “RĪGAS SILTUMS”. Wood biomass is used as the fuel. It is planned to produce up to 80 000 - 100 000 MWh of heat energy per year.
Delivery of wood chips to the boiler house is by using road transportation heavy trucks with moving floors. Wood chips are loaded exactly onto to the moving floors of the boiler house. The trailers are equipped with moving floors, which means that the vehicle pushes wood chips (instead of dumping) through the back of the trailer, approximate freight capacity is 100 m3. Road vehicles with half-trailers of moving floors are equipped with a cover, which during the transportation fully excludes any distribution of dust in the surrounding environment. The closed wood chip acceptance area is enclosed by walls from all sides (metal frame with planking), it can be entered through the liftgate. After the wood chips have been delivered and unloaded, wood chips are fed to the water heating boiler with the help of hydraulic sliders. The technological process provides immediate supply of the wood chips to the boiler unit for combustion. The planned fuel reserve, which will be fully stored in the covered warehouse, will not exceed the consumption of 7 days under maximum load. It is technically possible to operate the boiler house at the maximum load of more than 8000 h/year.
For purification of flue gases after the boiler, before the air preheater a multicyclone is designed to purify the flue gases from the solid particles, ash particles, providing the maximum concentration of 180 mg/m3.
Wood chips have high moisture content, which along the outflowing flue gases causes large heat losses during the combustion process. Thanks to water spraying in the fuel gas flow fuel gas condensation method allows to recover a significant part of this heat and significantly increases the efficiency of the boiler. Flue gas condensed increases total energy out-put up to 15MW per hour.
The operation of the fuel gas condenser economizer is fully automated according to the temperature schedule.
 

Water heating boiler with furnace


“Kohlbach” K12-12000 HW furnace and water heating three-step boiler has maximum permissible safety pressure of 10 bar and the maximum operating temperature of 125°C.
Constructively the boiler device consists of interconnected parts of power source: primary furnace, secondary furnace and boiler. The secondary furnace and boiler are connected above the primary furnace. In the boiler the fuel gas pipe system is positioned vertically.
 

Fuel gas and ash system


The fuel gas system consists of chimneys, multicyclone, air preheater, smoke pump, fuel gas condenser economizer with fuel gas fan and chimney. A by-pass is planned around the primary heat carrier of the gas condenser economizer that allows the maintenance of the condenser without interrupting the boiler operation.
For purification of fuel gases after the boiler, before the air preheater a multicyclone is designed to purify the fuel gases from the solid particles, ash particles, providing the maximum concentration of 180 mg/m3.
Combustion air preheater is equipped with automatic compressed air fuel gas purification system to provide higher efficiency of the heating surface.
Wood chips have high moisture content, which along the outflowing fuel gases causes large heat losses during the combustion process. Thanks to water spraying in the fuel gas flow fuel gas condensation method allows to recover a significant part of this heat loss and significantly increases the efficiency of the boiler.
The operation of the fuel gas condenser economizer is fully automated according to the temperature schedule, a condenser smoke pump is designed to overpower the resistance of the device.
Fuel gas temperature in condenser operating mode is 48.5°C at 40% fuel humidity; heat carrier secondary circuit return temperature is 45°C or 53.5°C at 60% fuel humidity; heat carrier secondary circuit return temperature is 50°C, and fuel gas temperature after the boiler (without condenser in active operation mode) is 200°C at 40% fuel humidity and 175°C at 60% fuel humidity. The fuel gas condenser economizer also reduces the content of the hard particles in the fuel gases to 100 mg/m3.
Separate stand-alone insulated steel chimney at the height of 35 m is planned for fuel gas discharge.
With the help of ash screw conveyor the ashes from the ash chain transporter and from the multicyclone and air preheater are fed to the ash chain transporters, which deliver them to the ash container. The ash container is closed, and the planned volume of it is 10 m3. According to the planned consumption of wood chips – 50 000 t/year (with a fuel ash content of 1.65% and flying ash content of 154 kg/year), it is expected that about 880 t of ashes will be generated in a year. It is planned that at the average capacity of the boiler house the container will have to be emptied once every two days.
 
 

About the Borrower


The Borrower is holding company and investment management vehicle JSC “White House Capital”, a company registered in the Republic of Latvia. JSC “White House Capital” is 100% shareholder of SIA “Eco Energy Riga”, which is the managing and operating company of the biomass boilerhouse in Ganibu dambis 40B , Riga.
Business valuation according to certified appraisal – EUR 11 660 000,00. The total assets of the biomass boilerhouse - EUR 6 372 324. Senior long-term debt from local bank – EUR 4 310 000.
 

Experience


The 100% shareholder of JSC “White House Capital” is Janis Timma, who is also shareholder of SIA “Powerhouse Sarkandaugava”, a company which is developing a new energy production plant in Riga – a 30 MW biomass boilerhouse. Janis is also CEO and shareholder of OU CROWDESTOR.
Janis has been actively engaged in energy sector since 2010, focusing on development and capital raising for different type and size energy plants. He has been Head of Energy department in BDO Law for 6 years. Since 2013 Janis is CEO of Latvian Cogeneration Association and is having active role in communication with government institutions regarding improvements of energy sector regulation in Latvia. Janis is also CEO and shareholder of 14 MW biomass boilerhouse in Riga. Educated in Finances at University of Latvia, Law at Business University Turiba and in WU Executive Academy, program Executive Energy Expert.
 

SWOT

Strong, opportunities

    • Total heat demand in Riga is ~ 2 500 000MWh per year. Annual production of the Company is 80 000 – 100 000 MWh which is only 3.5 – 4% from total demand;

 

    • Simple technology, lifetime for equipment is 25+ years;

 

    • Senior debt paid in less than 6 years;

 

    • Main competitor in TEC-1 zone will stop operations due to end of subsidies;

 

  • Experienced developer.

Weak, threats

    • Price increase of wood chips;

 

  • New competitors.


 
 

In annex:


Business valuation
Competition Council Case No. 3114/09/05/1
Financial reports of H1 2019

 

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