CARIBEX is able to offer 100% financing for these projects with loan programs at $100 million and above.

This debt structure requires the group sponsoring the project provide the land free and clear such that it can be subordinated to a first mortgage.

We have lenders highly interested in these “green” funding projects. They are offering 20 year loans tailored to fit the requirements of the specific facility.

The lenders are not requiring initial down payments or up front soft costs of any kind. The interest rate is in the 8% area and the loans are offered without pre-payment penalties.

The lender does ask that we do not approach them until they have had an opportunity to review our feasibility study however they will issue a conditional commitment letter in advance.

Once they have reviewed the study the process begins with a scheduled inspection by the lenders representative who will visit the local power company(s)  who will be required to enter into a contract to purchase the power produced by the new plant. The power company will allow the lender to look over their financial status so as to determine their financial fitness.  In addition, the inspector will also meet with the various companies who will be delivering the waste materials as each of them is also required to contract to pay a “tipping” fee” for each delivery to the new plant. The rationale here is that the plant receives revenues from only two principal sources, the sale of electric power and  fees from imputed waste. The financial success of the plant depends on the ability of the power company to make reliable payments.

In the event that the local power company fails to meet the lenders “fitness” requirements, meaning that they are not deemed “credit-worthy” it may be necessary for the local municipality or state government to sign on as co-guarantors. The reasoning for this is clear, the debt service requires secure and reliable payments to interest and principal and it can fall to the co- guarantors to make up deficiencies in the payments for the power “sold” by the new plant.

The lender is looking to ensure that the sources of revenue for the plant meet reasonable guidelines. In addition, the lender will also require a corporate guarantee from the group who is building and operating the plant. In general, this entity will be a PPC (Public Private Corporation) wherein 51 % of the ownership resides with the public entity, (municipality or state ) while 49% will be held by the individual or group bringing the program to the table.

No waste to energy facility generates sufficient revenues to cover its monthly debt service, maintenance, insurance and labor and all of them require a monthly subsidy from the guarantors. In general, the cost of the power transmitted to the local grid will be in the 8.5 cents per KW. The output is directly related to the quantity and nature of waste materials processed by the plant. The am mount of the subsidy is adjustable depending on the tipping fees and sale price of generated power.

It is the purpose of the Feasibility Study to determine the size (capacity) and cost of the plant. This, of course, is a function of the waste materials to be processed. In delivering the study we dispatch specialists to make these determinations (metrics) which are based on surveys and various sources of information provided by local officials.

The Feasibility Study considers:

INPUT: Existence and disposition of local landfills: Is it the intention of the authorities for the new plant to eliminate local landfills or will the plant only be concerned with the daily delivery of waste materials? What will be the total daily quantity and substance of the materials to be delivered?

Type of waste: Will the PPC plan to deliver, in addition to urban material, industrial and agricultural waste to the plant? If so, in what frequency and quantity?

Delivery: How, who and when will deliveries be made to the facility? This is a complicated metric requiring considerable research.

Future growth: The facility needs to consider the future growth of the area (city and regional area) so as to allow for expansion (increased input) over a period of 5 to 10 years.

Expected results: the study will deliver its findings to the PPC such that a five year financial projection will indicate the total overheads expressed by detailed line items for every category of expense contrasted against expected financial output. The revenues will be expressed as a function of generated KWH’s indicating break-even operations as well as with increasing graduations matching the imputed flows of materials to be gasified. Allowances will reflect the capacity of the plant which will match the expected growth of the urban areas as well as a expanded industrial and agricultural base. Equally, consideration will be given to increasing overheads as well as matching increases in the cost of the generated power to the local power company(s).

The PPC is expected to pay a fee to cover the cost of the feasibility Study. From this we pay our expenses including, travel, the rental of office space and salaries to local personnel retained to assist in researching and obtaining the data to be used in the study.  In general, it is expected that a period of 3 months will be required to deliver the completed study.

Once the lender has reviewed the Feasibility Study and approved of  the local electric company, funds will be made available (first draw) to the PPC to cover the costs of engaging the design team and beginning drafting detailed construction plans. At this time the PPC will also draw from the lenders a payment of $150,000 to recoup the funds paid for the Study.

Following the above, Caribex will begin writing the formal Business Plan. In this case payment  would be made (from a pre-approved draw reflected in the preliminary budget and again, a period of 3 months is expected for us to deliver the completed plan. The Business Plan includes letters of intent from local vendors and contractors based on their review of a set of preliminary site plans and specifications.

It is the aim of the Business Plan to engage as many local vendors and contractors as possible so as to retain the greatest amount of the construction and materials funding in the local area 

CARIBEX Inc is ready to start your Waste to Energy project when you are.