BD Project Proposal

Private & Confidential

SARC Consulting Limited, registered in England & Wales, Reg No: 6886660. Registered address: 32 Channel House, Aston Street, London E14 7NJ

SARC

Consulting

Contact: M Jowardhar Mob: +447974 662 769 Email: [email protected]

March 2010

BD/PP/WTF2000

Silcasia Energy

WTF2000 – Waste to Fuel Conversion

Project Proposal

Dhaka Bangladesh

This proposal has been prepared by:

SARC Consulting Limited For and on behalf of:

Silcasia Energy

SARC

Pag

e2

Contents: Page:

Introduction 3 -4

Project in Brief 5-8

Introducing WTF 9-17

Business Objectives 18-19

Mission Statement 19

Action Plan 19

Business Structure 20

Business Relationship 20

Project Schedule 21

SARC

Pag

e3

Introduction

Silcasia Energy Limited (SEL) is a registered limited company owned by a group of NRBs

living and working in the United Kingdom. The company is primarily working towards

setting up a waste management and fuel conversion plant (the project) in the City of

Dhaka, Bangladesh.

SEL has engaged SARC Consulting Limited on agreed terms to work on preparation of a

business proposal and to carryout a pre-feasibility study for establishing a waste to fuel

conversion plant in Dhaka Bangladesh.

The company‘s aim is to establish itself as a major producer of Bio Fuel from municipal,

industrial and agricultural waste. A business module has been conceived within a PPP

framework. More elaborated framework is outlined in this document for further discussions

and consideration by intended project partners.

In this document we provided details about the technology and the company that SEL

have paired with in promoting the project. However, some specific details about the

technology will not be disclosed at this stage for strategic business privacy. All disclosures

will be made to the project partners after the signing of a partnership MOU, and an LOI

agreement with the technology supplier.

Our proposal details the business structure which has been framed in context of the

opportunities that are available in terms of feed source, market demands, production and

investments, and profits possibilities presently prevailing in sustainable and alternative

energy strategy of the governments.

It is recommended that a tri-party partnership project is set up to manage waste,

produced fuel and generate electricity under a feed guarantee for the project lifetime. This

will ensure long term and sustainable low emission energy for power generation.

Furthermore, the project concept guarantees a carbon free environment and will

contribute to improving the environment and national economic & social development.

SEL‘s proposal for setting up this project in Dhaka is, on the main, twofold that it wants to

bring alternative energy from raw waste into use as supplement to the main energy

source and to ensure technological migration for national benefit. This will facilitate

generation of new and local employment opportunities and training in technology

development in Bangladesh, whilst ensuring a sustainable energy and cleaner environment

for future generation.

SARC

Pag

e4

This document therefore, generally outlines the proposal for a biomass fuel plant in Dhaka

and a PPP modelled business encouraging local and foreign investment to improve power

& energy infrastructure and establish a sustainable source of fuel from available waste. A

detailed feasibility of the proposed business model will be required in the second stage of

the project proposal to assess project viability. This document will enable assessment and

exploration of first expression of interest of all three parties, especially, the government of

Bangladesh, and lead to a constructive business relationship.

SARC

Pag

e5

Introducing the Project Proposal

This document is to be read as an outline of the proposed project for discussions and

exploration of a pre-feasibility study to examine whether a WTF2000 waste to fuel

conversion project is likely to be viable in Dhaka, Bangladesh. However, it shall not be

read as a final statement of the proponents or the technology supplier. Further studies

would be required to consider the whole-worthiness of the proposal and to fully integrate

all variants and associated business activities pertaining to waste management in Dhaka

City. This signifies a vital role of the City Corporation as a client or active partner in the

proposed project.

The Project:

SEL Proposed to set up a biomass fuel plant in Dhaka, Bangladesh, using municipal,

industrial and agricultural waste as the feed raw material for production of bio-diesel. The

company wish to establish the project in partnership with the Government of Bangladesh

and the local business community.

Technology:

The process for conversion of waste to fuel used is de-polymerisation which will convert

raw waste to fuel using a catalyst at 270°C - 350°C. Unlike other biomass process

technology, WTF2000 in its process is carbon neutral and does not produce toxic

emissions that are produced at high temperature application, or emits any toxins to the

environment. Only emission is heat from exhaust whilst cooling by cycle of clean water in

a coolant.

The fuel generated from this process can be used for electricity generation or can be used

as jet fuel. Advantage of this fuel is that the carbon emission from the engines is 60% less

than normal diesel, a massive 10% less than the target for carbon reduction under the

Kyoto protocol. However, at a fraction of the processing cost the emission can be reduced

to a total of 80%.

The technology has other great advantages and can be utilised to benefit local business.

Main advantage of this technology is to manage waste in responsible manner and produce

energy as by-product to minimise the costs of waste management to local authorities. It

further reduces the need to use landfill sites for dumping waste causing hazard to the

local environment and depletion of the ozone. Thereby, this process is reducing the

factors for climate change and bringing about major improvements to the effective use of

our limited resources.

Planning and legal implications:

Setting up a fuel production processing plant in Dhaka will be subject to local planning

regulations and must comply with national and international law relating to protection of

SARC

Pag

e6

the environment and the inter governmental treaties on carbon reduction. This aspect of

the compliance requirement will be fully considered in the pre-feasibility study to be

undertaken in Dhaka as part of the initial discussions with the Bangladesh Government

and local partners.

Environmental impact assessment:

A full Environmental Impact Assessment (EIA) will be carried out during the feasibility

stage and an action plant will be put in place to ensure continuous assessment is

undertaken to minimise any risks and improvements are undertaken as a priority. The

company will also ensure to provide regular periodic publication of its EIA report in the

local news paper with summary details of the quality of air, noise and environment with

action for improvements where appropriate.

Licensing:

The WTF2000 technology will be licensed, site specific, by the supplier to local company

under a ten year technology non-proliferation guarantee. Thus, the local company cannot

disclose the technology to a third part or try to replicate the process without further

license from the supplier. After ten years the technology will be fully transferred by the

supplier to the local company without further charge.

The Market:

Energy shortage in Bangladesh is a historical fact and the demand for energy is

continuously growing. Need for cleaner fuel is growing and the generation of electricity

and rural irrigation energy requirements are very large in demand. Part of the fuel supply

can be provided to Biman for use as jet fuel for their aircrafts. It is not at present

considered to provide this fuel for road transport. However, supply and efficiency of the

target market will later determine whether to supply of this fuel to be extended to road

transport services.

Price:

The price determining factor is ―Control‖, and in the energy market it is now in two basic

forms. First, the natural resource energy are becoming limited in supply and controlled by

few countries. The second and increasing form of energy source is technologies and these

are controlled by few multi-nationals, mainly energy companies. As the price of energy like

any other commodities are dependent on supply & demand the price are therefore

determined by these two factors. All sensible businesses would like to ensure price

stability for their products, services and supply and as such will put plan in place to ensure

it is achieved.

We strongly believe that the demand for a stable source of fuel and price stability for

Bangladesh is important. At present it is difficult to estimate a level of contribution this

project will make to total energy need of Bangladesh and the price stability will be

SARC

Pag

e7

determined by what factor. And the markets‘ demand for clean fuel is unlikely to be met

by this company alone.

However, as the raw material will be sourced locally through the Municipality, the fuel

price for local consumption of the company‘s produce will remain stable even at market

volatile periods.

The site:

We recommend that the project site is located within the City of Dhaka on or near the

location of present waste collection/dumping ground. This will meet the overall objective

of the project is to reduce carbon emission and minimise transport journey and costs.

The site will be designed to engineering specification of the technology supplier and

constructed by local contractors using local building materials and labour.

It is highly recommended to locate the site close to clean water reservoir for access to

water for cooling exhaust.

The site will be noise pollution free, and consisting a one storey building and lots of trees

planted around the complex maintaining a total green aspect in line with the project‘s

vision.

Plant:

The plant‘s mechanical and electronic components will be made in Germany and

transported by ship to Bangladesh and assembled under the supervision of German

technicians.

The supplier‘s technology specification details a low system maintenance requirement and

short maintenance interval. The system is relatively easy to maintain and, local people will

be trained to operate and maintain the plant under a service agreement with the

technology supplier. Cost of this agreement will be kept to a minimum.

Partnership:

A PPP business model is highly recommended for this project. A tri-party business

partnership is being proposed between Silcasia Energy, the Government of Bangladesh

and the local business community, each holding one third of the equity share in the

project. Such a model will create a genuine sense of partnership and encourage more

investments by NRBs in national projects that are of immense importance for national

growth and prosperity.

SARC

Pag

e8

It is also anticipated that under such arrangement a continuous technological

advancement can be achieved in future and a wider tech-partnership will develop between

the EU Community and Bangladesh.

Financing the project:

It is proposed that the project to be financed by proportion to equity share of each

partner. However, this matter will be more closely examined at the negotiating stage by

the partners. It is anticipated that financial support by the local banks, the government

and the World Bank are primarily institutions identified where funding can be accessed. A

significant part of the investment will be made by the NRBs as a foreign investment

company.

Capital Investment & Return

A WTF2000 is estimated to costs about 25 million Euros, plus local building and site costs.

To make the project workable the Government will have to provide the land free of costs

to the project on a lease basis for a period determined as project life time. The raw

material supplied to the plant will earn a gate fee from the municipality for the

management and processing the waste to environmental requirement standards. Should

these two aspects of the business are achieved, as these will be considered as income, the

estimated period for investment returns from the business activities will be achieved within

4.3 year. Thus achieving very good return for the investment and it will allow the company

to expand rapidly in same activities.

Based on this assessment, it is projected that the company‘s total investment, in this

sector and power generation projects in Dhaka and Chittagong Cities, can be achieved

within five years is about 600 million Euros. The total fuel output result will be a massive

150 million litre of diesel produced annually. However, the company will be advised in this

period to limit itself to a 300mw of electricity generation activities adjacent to the fuel

sites.

Employment & Training:

The project proponents will ensure that local employments are generated through this

project. This will be achieved through working with local companies for the collection of

waste, distribution of produces, and training local people for job in this industry and

associated technological fields.

Site security:

The site/s will be secured by perimeter fencing and monitored from the central office by

closed circuit television cameras with 24 hour recording technology.

SARC

Pag

e9

Introduction of Waste to Fuel Process

WTF enables municipal and commercial bodies alike to mitigate the ever-growing costs

involved in conventional waste handling procedures. It converts a loss making activity into

a profit orientated and environmentally friendly production process.

The following commentary is based on the research and design of the WTF core unit

designed specifically for integrated waste management and biomass conversion projects.

It complies and aligns with criteria stated by initiating governments. These criteria require

that the plant exemplifies the very latest technology in waste management activity — that

it complies with the most advanced and rigorous control regulations current in European

legislation with regards to the environment — that it functions independently of the local

infrastructure — Eg. that it does not draw or require power to operate from outside

sources. The WTF integrated process fulfils these requirements in full measure.

Commentary on Waste to Energy Activity Today

Fuels from residual substances and biologically regenerating raw materials represent the

future of energy development. With technologies now becoming available, these ‗synthetic

fuels‘ will increasingly replace declining oil reserves in the future. Synthetic fuel production

is possible because sufficient quantities of raw materials exist to develop deliverable

quantities to replace fossil fuel production. These materials include wood and plants, the

bio-waste products of our civilization like plastics, animal and plant wastes, waste oils and

other organic residual substances — all of which are usable because of their intrinsic

energy content.

In addition to the intrinsic energy content of synthetic waste materials, there is an

additional objective in using these materials: capturing the hydrocarbons contained in

them for conversion to fuel. Present day recycling procedures, like high temperature

gasification with efficiency ratios of approximately 10% cannot recover hydrocarbons.

Other well-known procedures, like pyrolysis, are not able to capture hydrocarbon

pollutants, such as halogens and metal steams, which often remain in the final product of

existing recycling plants.

Unsatisfactory results from present-day recycling efforts result from the essential structure

of existing processing methods. Transforming residual substances with each of the well-

known recycling procedures requires temperatures of 450oC and higher, a temperature at

which coke crystals begins to form from residual substances. Such high temperature

procedures decompose the hydrocarbons in the plant nearly completely into coke crystals

and methane. Thus, relocated hydrogen atoms convert the existing hydrocarbons, CH2,

into methane, CH4, and coke crystals, C. In other words, solid coke and methane gas,

CH4, are produced from liquefiable hydrocarbons.

SARC

Pag

e10

But while coke and methane can be used further as an energy output, the by-products of

such high temperature procedures, like C02, Dioxin and Furan, are unacceptable

environmental hazards.

Other technologies, which are based on alternative sources of energy that are complex

and limited, such as platinum, are still in the early stages of development.

A new recycling formulation was necessary that would convert existing hydrocarbons not

into methane, CH4, and coke crystals, C, but into CH2 and only then in molecule lengths

that reduce and bind in a manner that separates unusable pollutants, in essence, the new

formulation returns to the natural processes used for hundreds of millions of years where

fossilized by-products from the seas settled into suspended clay minerals and ultimately

formed fossil fuels, such as oil hydrocarbons.

The new formulation also avoids creation of unusable, environmentally unfriendly

materials such as PVC‘s and Teflon, which when mixed together, can easily form dioxins

and Furan at high temperature.

The key elements of the process, therefore, are as follows:

• A temperature from 270oC to 350oC in place of 450oC.

• Ion exchange of catalysts.

• Up to 100% conversion of crystallized y-catalysts, which are extremely active.

These elements result in a final product of high-quality synthetic lightweight oil similar to

diesel fuel.

The formulation produces lightweight oil similar to diesel fuel through catalyst reduction at

a fraction of the costs associated with existing recycling processes and uses materials to

initiate the catalyzing reduction that are available at realistic prices.

In order to achieve the necessary quality of product, development of an engineering plant

is necessary that would require low maintenance and offer reliability of high-quality diesel

fuel production. Such a plant is a self -sustaining energy production platform. It uses up to

10% of its own energy formation to run.

In the plant‘s closed-process cycle, the input waste materials are mixed with the catalyst,

which initiates a catalytic reaction characterized by the following results:

Molecular de-polymerization at low temperatures (290-350oC) and virtually pressure-

free (less than 0.lbar).

SARC

Pag

e11

Hydrocarbon conversion rates not previously achievable of more than 80% without

the same magnitude of dangerous residual by-products.

Decontamination of dangerous residual by-products (halogens, etc) in a liquefied

process that yields salt.

High-quality diesel fuel or jet fuel suitable for use in today‘s engines.

Pre-processing – Preparing the Waste for Processing

The application of municipal solid waste makes great demands on preparation

technologies. When smell nuisance is expected, the equipment needed for unloading and

storage has to be executed in an appropriate way.

All preparation technology required in waste processing depends on the attributes of the

input materials. It generally involves a separation, shredding and drying process.

Working with waste containing metal, stone and glass, a densimetric separation system

has to be installed in the first step to separate the stone and glass fractions. The metals

are separated in the second step. After this two-step process the material will be treated

in a mazerator and after a production buffer, the minimum grain size will be secured by a

cuffing mill. The maximum grain size of the remaining input is 3mm. In case the humidity

is over 15% the material is dried in a rotary furnace. From another production buffer the

WTF 2000 is fed using a belt conveyor.

Using oils as input material, the preparation consists of systems to unload and store the

liquids as well as some pumping equipment to feed the WTF 2000 core unit. According to

statutory provisions, safety installations such as oil retention pans and oil separators have

to be added.

SARC

Pag

e12

Working with bitumen, there have to be installations to unload and store the input

material adapted to its attributes. A High Sheer Mixer assures controlled crushing of the

bitumen. The material crushed is stored in a heated tank and fed by special pumps to the

WTF 2000 core unit

Using rubber and plastics the preparation is very similar to the handling of car fluff. It has

to be checked that metal separation may not be necessary. In general cuffing mills have

to be provided with appropriate cartridges to ensure minimum changing time e.g. in case

of maintenance or breakdown.

WTF 2000 Core-Unit

The WTF 2000 is an aggregate built to transform input materials containing hydrocarbons

– such as oils, plastics, animal waste or biomass etc. - into mineral light oil.

The core of the unit is a liquid circuit working with temperatures below 400°C. The

application of a specialised catalyst causes a shortening of the hydrocarbon molecular

chains.

Central main elements of the aggregate are the reaction unit, in which the input materials

are transformed applying a catalytic process, a separator where steam and liquids are split

and the distillation column, where the oil steam is condensed after passing through,

caught and led to a product storage tank.

The reaction unit is electrically powered with approximately 200 kW. All parts of the

aggregate running with process-temperature are isolated.

Input material is applied to the process either in solid or in liquid condition. Solids are

applied by an input-spiral as an anhydrous mass with minimum grain size. The input of

liquids is designed as a special combined pump- and tank-system. Catalyst and other

surcharge materials (neutralizers) are put into the system using automatic dosing units.

All material that cannot be transformed into light oil as well as used catalyst is discharged

by a sedimentation system using a particular discharging spiral. These high concentrated

residuals are evacuated using a sluice system. They are to be disposed by the customer.

All apparatus, tanks and piping is made of stainless steel. All connections are flanged or

screwed. To clean the aggregate a flushing system is installed.

Controlling and monitoring is secured by a variety of sensors, measurement devices and

actuators interacting to a state of the art control unit. All electrical equipment is integrated

modularly into the WTF 2000. For safety reasons mechanical as well as electrical control

and monitoring devices are installed.

SARC

Pag

e13

All Engineering, Construction and manufacturing of the WTF 2000 match the actual

technical regulations valid in the European Union. Safety features and equipment installed

are state of the art Final required inspections will be done by certified advisers (TUV).

For safety reasons the WTF 2000 core unit is to be erected in oil retention pan made of

concrete and covered with an oil proof coating matching all statutory provisions.

The aggregate is designed to be connected to a combined heat and power unit (CHRU)

that runs with light oil produced by the WTF 2000.The CHRU provides the required

electrical and thermal energy for the WTF 2000 core system. To secure continuous

operation when the CHRU unit fails, there has to be a separate power feed installation

(300 kW/400 V).

Fig: WTF 2000 Schematic representation

Input materials

• Plastics of all kinds (including PVC‘s).

• Rubber, including that from automobile tyres.

• Waste oils, waxes and fats of all types (including hydraulic oils).

• Agricultural wastes (including animal waste products, spoiled food, etc).

• Hospital waste materials.

• All refinery by-products (bitumen, tars, etc).

• Biologically regenerating raw materials (wood, vegetables, meat wastes, etc).

SARC

Pag

e14

Product Storage

The light oil produced in the WTF 2000 is stored in double wall tanks. These are fitted with

safety features and equipment to prevent overflow and leakage. According to local

requirements and statutory provisions e.g. oil retention pans and oil separators will be

added. This is valid also for all road tanker filling systems.

Parameters of WTF 2000 core unit

Site Conditions

Ambient temperature:

Factory hall +5° C to +55° C

Relative humidity factory hall 20% to 95%

Site altitude below 1000 m sea level

Plant power input, if required

Voltage supply plant 400V, + 10%, 3 pH, 50Hz + 2%

Required power plant 300 kW

Voltage supply light 230V. 1 pH, 50Hz

Required power light Maximum 10 kW

Valve, electronic

Cooling water

Required quality Drinking water

Required quantity 10 qm/h

pH value 6,5 … 8,5

Hardness 50° dh

Carbonate hardness

Without stabilizers 8 … 12° dh

With stabilizers 18 ... 20° dh

Chlorides

Without stabilizers 300 mg/l

With stabilizers 500 mg/l

Sulphates 500 mg/l

Iron 0.3 mg/l

SARC

Pag

e15

Overall salt content 3000 mg/l

Non-dissolved solid matter 15 … 50 mg/l

Grain size 50 … 100

Supply pressure 350 kpa

Cooling water supply temp. max. 30C

Cooling water return temp. max. 40C

Flange connections:

According DIN Norm; size has to be verified during project execution

Input material

Solid Input Material To be defined prior to project execution

free from minerals e.g. stones, glass,

ceramics etc. free from metals

Quantity Maximum 4000 kg/h

Grain size < 3 mm

Humidity < 5%

Fluid Input Material To be defined prior to project execution

Quantity density To be defined during analysis phase

Grade of filtering 0.01 mm

Content of water Max. I5 %

Fluid input for start-up (refer to above.) Quantity Max, 24 Cubic Meters

End product (synthetic light oil) converted by catalytic de-polymerisation

Quantity maximum 2000 l/h

Other characteristics To be defined during project execution

SARC

Pag

e16

Media to be disposed during production

Residuals with catalyst loaded parts of the input

material, which cannot be transferred into

Synthetic light oil

Condensate1 water, with oil, separation from fluid input

Condensate2 water and expellable materials, with oil, separation from preheated input material (up to 200° C), can contain hydrocarbons

Media to be disposed by emptying the WTF 2000

Fluid input, with catalyst loaded input material, partly transferred to synthetic light oil, preheated (up to 200° C), can contain hydrocarbons

Dimensions

Minimal required floor space: 60 * 48 m

Height of WTF 2000 Decided when the project survey is undertaken

SARC

Pag

e17

Noise level of the WTF 2000 maximum 90 dB (A)

SARC

Pag

e18

Business objectives:

Silcasia Energy following an internal analysis of its business propositions has agreed to

develop a set of ―business objectives‖.

1. To promote the WTF2000 process as a means of reducing the need for land fill sites

in compliance with National Government objectives and environmental planning

legislation.

2. To gain the co-operation of local authorities and other regulators in regard to:

· Site identification

· Use of collected non-toxic, non-radioactive refuse

· Participation in Project and use of local resources

· Examine existing waste management contract obligations and form parnership

3. To utilise the WTF2000 process as a means of recycling waste products such as

industrial, Agricultural & Municipal waste

4. To ensure the research and development of the technology enables the WTF2000

process to handle variable volumes of raw material, with maximum mobility.

5. To obtain independently verified scientific data/analysis on the WTF2000 products

and processes.

6. To identify capital requirements up to commercialisation stage.

7. To maintain the confidentiality of the WF2000 process.

8. To promote the distinctiveness of the WTF2000 process as compared to other

waste management processes, especially Neutralysis.

9. To develop viable products resulting from the proving of the WTF2000 process,

including:

· intellectual property

· technology licenses

· end-product(s) - aggregate etc.

· Supply contracts

· etc.

SARC

Pag

e19

10. To promote the WTF2000 process as a means of extending the life of existing and

potential extractive resources, including Gas, Coal, Wood and aggregate.

11. To closely monitor alternative waste management processes and practices.

12. To promote the WTF2000 process as being an environmentally friendly alternative

to the use of extractive resources, e.g. Coal, wood and all aggregate fossil fuel.

Mission Statement The following mission statement has been adopted by the company.

“...using tomorrow’s technology today - converting waste to fuel for a sustainable energy and cleaner environment...”

ACTION PLANS

As a result of the formulation of Strategic Objectives, the following Action Plans have been

developed by the company for adoption:

Action detail (what the Action is)

Action Duration (the estimated time required to complete the Action).

Action Scheduled Start (when the Action should, or is due to, commence).

Action Scheduled Finish (when the Action is due for completion).

Action Predecessors (what other actions need to be undertaken before the

Action in question - if any).

Action Resources (who / what resource is allocated to undertake or support the

Action).

Critical Path (the development of a "Pert Chart" or similar which allows an

overview of those Actions which are critical to the implementation of the Project,

and / or those Actions most likely to cause a delay in implementing the Project).

A monthly summary of Actions required to be undertaken to assist in Managing

the Project. This will ensure that the Project is kept "on-track".

SARC

Pag

e20

Proposed Business Structure

It is proposed that a three way partnership is developed for this project between the

Government of Bangladesh holding a 33% share in the project and a maximum of 20%

equity share would be invited to be held by the local business community whilst the

remaining shares will be held by Silcasia Energy Limited as a foreign company.

The diagram below illustrates the structure and its relationship:

Te suggested apportionment of the equity interest is aimed at facilitating the NRBs‘

interests from major countries where NRBs are established, mainly Europe, America and the

Middle East.

Business relationships

The company will establish new relationship with other companies in the similar field of

work and maintain relationship with the existing network of service providers to the

municipality, especially the waste collection network. Efforts will be made to work closely

with the local communities in promoting social and economic welfare and improvement of

life aspects in the company‘s locality. The company will time to time decide the form and

method of a relationship what it wish to establish with a group or an individual entity.

In all matters of company‘s dealing it will be transparent and open.

The values are:

Driven by vision,

Run by ethics,

Sustain by values.

SARC

Pag

e21

Project Schedule

Phase 1.

March 2010 Invite potential companies for prospective partnership and undertake

pre-feasibility study report

April 2010 Agree terms of partnership and put private sector partnership in place

April 2010 Agree PPP terms

May 2010 Setup local company

May 2010 LOI in favour of SARC for technology transfer

May 2010 Undertake full feasibility

End.