Client: Biomass Group
International Finance Corporation
Biomass Group is developing a series of 10MW biomass-fired power plants under the new independent power laws in Sri Lanka. The primary biomass fuel is gliricidia, a fast-growing, short-rotation nitrogen-fixing tree that is found growing wild throughout Sri Lanka, and which is grown by plantations as a shade tree and soil improver and by smallholders for “live fencing”, support for other crops, animal fodder and fertiliser. The majority of Sri Lanka is farmed by smallholders, and Biomass Group is organising the smallholders to grow a combination of gliricidia, vanilla and pepper (which use the gliricidia trunk as support) with the objective of materially increasing their incomes, raising the standard of farming practices and in the process making available a virtually limitless source of commercial biomass for energy generation.
Sri Lanka has no fossil energy resources and the majority of its electric power is generated from heavy fuel oil. This is harmful to the local and global environment and a massive drain on the country’s limited foreign exchange reserves. Developing indigenous biomass-fired power is therefore potentially hugely beneficial at a national level, as well as at a local level where smallholder farmers have the potential to increase their annual income by circa 50%.
Bainton Capital carried out a full engineering and commercial feasibility study for the development of a series of 10MW gliricidia-fired power plants utilising the gliricidia resource being developed by the client. The analysis included analysis of all the local factors, including grid, despatch, the new electricity laws, proximity to the biomass supplies, fuel handling logistics and processing. The Bainton Capital team produced a performance specification for the plant and assessed primary equipment suppliers, EPC contractor interest and local civil engineering, construction and erection capabilities. Bainton Capital also contributed to an IFC part-sponsored report for site selection, produced and maintained the project financing model and supported discussions with lenders and ECAs.
Bainton Capital also developed a viable non-recourse finance structure in conjunction with local banks, developed the necessary financial models and demonstrated viability for the concept. At the time of writing an international power plant owner/operator is investigating sites for the first power plants.