In August 2012, Camco Clean Energy announced the purchase of the 2MW Havys biogas project, based at a leading palm oil mill in Palong, Pahang state, Malaysia. The project will use anaerobic digestion to recover biogas containing methane from palm oil mill effluent ("POME"). Once commissioned, the project will be amongst the largest of its type to date to generate electricity for supply to the Malaysian national grid.
Waste, including POME, is a significant issue for the region's 1,000 plus palm oil plantation owners, local communities and the region in general and contributes significantly to total emissions. As a result, the Malaysian government recently introduced a renewable energy feed-in tariff to incentivise the conversion of waste into power and it is expected over the coming years that palm oil producers will come under increasing pressure to reduce waste from their production processes.
The project is being developed under a 13 year build-own-operate-transfer ("BOOT") agreement with the mill owner commencing upon the plant's completion. Under this agreement, the mill owner will provide sufficient POME feedstock free of charge covering the full contract period. Once operational, the plant will generate revenue from the sale of electricity to the grid and from the sale of carbon credits generated under the UN clean development mechanism. The mill owner will receive a portion of the power and carbon sales under a revenue share agreement.
The electricity will be sold to the grid through a renewable energy power purchase agreement ("RE PPA") to be entered into with one of the Malaysian utilities, under the renewable energy feed-in tariff which sets a guaranteed off-take price for the duration of the project (see www.seda.gov.my for further details).
The Havys project is an important milestone for Camco SEA and represents a significant step towards its goal of developing and owning a portfolio of emissions to energy projects across Southeast Asia. With a strong pipeline of future projects and significant project development expertise and local knowledge, Camco SEA is well positioned to deliver on its strategy and become the leading player in the emissions to energy market in the region.
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