LOS ANGELES, CA -- (Marketwired) -- 08/13/13 -- Blue Sphere Corp. (OTCQB: BLSP) is on the cusp of breaking ground on two significant electrical production plants in the United States, using Anaerobic Digestion technology. Blue Sphere's plants located in Charlotte, North Carolina and Johnston, Rhode Island are expected to produce 5.2 MW and 3.2 MW of electricity daily. Blue Sphere's management believes they are at the forefront of a technological shift that will change how the United States will process waste and produce a substantial amount of its energy. There are many practical and regulatory factors that point to success for Blue Sphere's initiatives.
The CEO of Blue Sphere, Shlomi Palas, had a good explanation of Blue Sphere's business plan in a recently published interview. "Blue Sphere develops, builds and operates facilities which use organic waste to produce clean energy. Blue Sphere is positioned in a multibillion dollar arena which is currently serviced by very few and small-scale competitors. The endless supply of waste, which we call "the new oil fields", the new strict Federal and State legislation to divert organic waste from landfills, the already-in-force legislation to substitute fossil energy with renewable energy, the Federal and State incentives for the activities above, all these tectonic movements are the power behind Blue Sphere's raison d'être. Blue sphere has an objective of building a portfolio of 60 MW high yield assets with an IRR greater than 15% with-in the next 5 years."
Anaerobic Digestion technology has been used for years in Europe to convert organic and food waste into electricity. There are approximately 8,000 anaerobic digestion plants functioning in Europe, but only a handful in the U.S. Most of the U.S. based plants are small and use manure waste on or near animal farming sites. The technology utilizes the waste product to extract methane gas and the methane is in turn injected into generators to produce electricity. The electricity is sold into the local grids and the remains of the waste are sold as a supplement to fertilizer. In the end, the waste is turned into usable and saleable products, thus there is nothing left after the process. Blue Sphere has partnered with one of the leading designers and manufactures of anaerobic digestion facilities out of Germany, Biogas Nord, to co-develop and build these facilities in the U.S. Biogas Nord has built approximately 400 anaerobic digestion facilities in Europe and worldwide, and had over $100 million in revenues in 2012.
Blue Sphere has other major partners on these projects as well. They have brought in a hedge fund that specializes in Cleantech investing as an equity partner. This equity partner has committed to up to $7.5 million for the Charlotte project and $5 million for the smaller Johnson plant. Caterpillar Financial Services, a division of Caterpillar Inc. is providing almost $18 million in debt for the construction of the Charlotte project. Both groups are expected to fund upon their respective commitments to the Charlotte project by the end of August, which will allow Blue Sphere and Biogas Nord to begin construction of the facility in September of this year. Blue Sphere's management has stated that they expect the Charlotte project to be complete and producing within 12 months of the beginning of construction.
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