Bluesphere biogas project receives term sheet for $15 million

By Katie Fletcher | July 14, 2014

Bluesphere Corp. makes headway in its waste-to-energy projects in the Northeast with the receipt of a term sheet from Energy Power Partners, a private equity fund manager. The term sheet includes full equity financing of over $15 million for its 3.2 MW biogas project in Johnston, Rhode Island, generating electricity from biogas derived from organic waste.

The final, definitive agreement between Bluesphere and EPP will be agreed upon by no later than Aug. 30,. The agreement pursuant to which funds will be made available to Bluesphere in cash for the construction and implementation of the project subject to completion of final due diligence by EPP.

The launching of the Johnston project was not contingent upon the partnership with EPP for the financing of the anaerobic digestion (AD) facility. “However, EPP is an extremely desirable partner not only for its expertise and experience in implementing projects of this nature, but also because it is offering to finance this project with 100 percent equity,” said Shomi Palas, Bluesphere CEO, in a press release. “Not having debt creates greater cash flow and minimizes restrictive covenants.”

Bluesphere will still maintain a meaningful equity stake in the project, while also earning project management fees and profit-sharing with build-in performance incentives, according to a press release. The comprehensive development biogas projects like this require, pairs well with partnerships to bring them one more step forward to completion. “This is another huge milestone in the development of this project,” Palas said.

The Johnston project has started on time according to Palas, and anticipates reaching commercial operations and delivering power by December 2015.

Additional developments with the Johnston project include a recently announced signed letter of intent (LOI) with a company in the recycling and waste industries to supply between 100 to 200 tons of organic waste per day to the facility. This is added to the collection of other agreements and LOIs for a 15-year electricity purchase agreement, site lease with purchase option, compost off-take agreement and EPC contractor.

In June, Biomass Magazine reported Bluesphere had just received a difficult air permit for the waste-to-energy project in Charlotte, North Carolina, signed a memorandum of understanding (MOU) with a local developer operating in the recycling and compost business to co-develop a waste-to-energy project in the Boston metropolitan area, and had just started the project in Rhode Island. According to the article, the total revenue from the Charlotte and Rhode Island projects combined is projected at $150 million over the next 15 years.