2014 OAG Bio Power - Project Replacement of Existing Diesel Plants To Gassification April 2014

Introduction
Agricultural waste is traditionally discarded, but when used in biomass gasification 1.8 kilogram
yields about 1 kWh of electricity. The cost of power derived from the aquired waste would be about
half of what would be spent on kerosene and diesel fuel for generators and lanterns. This
development plan presents the opportunity to redevelop existing diesel powered generators that
currently contribute 25 MW into the local power grid, into more efficent cleaner bio fueled driven
sub stations and at the same time produce household gas that is used in almost every hosuehold
across the Country and is entirely imported at high cost to the consumers
Contents
1. Objective
2. Project summary
3. Background project and Bio fuel data

1
One Asia Group Pte Ltd

4.
5.
6.
7.
8.
Required to develop the project Benefits of using bio fuel and land useage
Planning for funding
Appendix
Bio of key team members
Site pictures of one of the diesel powered stations to be converted into gassification drivers
under the project

#1 Objective
This business plan sets out to outline the renewable energy situation in Cambodia and the
opprtunities available to project development.
Our requirements are to seek funding for a total of three million five hundred thousand US$ . With
drawdown on the funding being phased in, with four separate drawdowns for each subsequently Re
- developed diesel powered station into Bio fuelled power stations that are existing Diesel fuel
powered assets within the outer lying provinces of Cambodia.
The redevloped power stations will in adittion to the energy produced also produce Gas as a by
product, the bottled household gas would once sold to consumers contribute to a very early
repayment of princple and also offer very strong project returns.
Financial forecasts are attached and indicate very healthy project returns.
We look forward to your response and ultimate comitment to joinning us in this project
development.

2

#2 Summary

Cambodia relies on nearly 100% imported oil fuel from overseas to generate the countrys energy
needs. If 10% of expected consumption of oil diesel used for projected power generation in 2024
was substituted with biomass, it would save the equivalent of 30 million USD of foreign currency.

Current imports of cooking gas from Thailand and Vietnam is at 10,000mt a month. With a wholesale
price pf $1,000 mt or retail cost t $1,500 a month which puts a market value of $120 million a yr
wholesale. Cambodia does not produce any cooking gas all is 100% imported.

Under guaranteed agreement with Kingdom of Cambodia, Prime Asia Group Cambodia will take
mandate to redevelop existing diesel powered generators into efficient biomass powered power
generating facilities and produce and sell locally produced gas into the provincial consumer base.

Our mandated development schedule allows us to redevelop up to three power stations in the
Cambodian provinces. Collectively the new plants will each produce 4 MW of electrical energy that
will be sold into the energy grid under a power purchase agreement issued to Prime Asia Group
Cambodia.

Once commissioned, the first facility will operate continuously and is expected to net over $18,000
per day. Power plants operated with local sourced biomass feedstock will lower electricity costs and
improve local economic activities.

In addition to the positive economic impacts the project will creating lasting environmental
improvement by reducing Cambodias carbon footprint and job creation will support social,
educational and health strategies of Cambodia. This project will be an important national initiative
that can be replicated in as many as 25 additional locations throughout Cambodia.

The Power Purchase Agreement (PPA) carries a letter of support from the state generator,
Electricite du Cambodge, and incremental commercial and Political risk coverage will be secured.
Additional insurance will cover:

Contract frustration
Failure to honour guarantee , plus non-payment, and
Transferability protection on earnings made within the Country
Payback within second year after commencement of operation, positive NPV and IRR
assumption forecast between 30-35%.

Prime Asia Group Cambodia along with our established bio mass power provider, jointly propose an
environmentally responsible, energy generation gasification facility using agricultural waste as the
feedstock, which will generate excellent financial returns, guaranteed under agreement with The
Kingdom of Cambodia which will be supplemented with risk insurance guaranteed by strongly credit
rated political and project financing providers.

3

#3 Background of the proposed project
With the on-going increase in oil prices, renewable energy has been given more attention in the
world. Within the alternatives, the bio-energy field has been considered as one of the most
promising alternative renewable energy sources. Already some countries such as Brazil have been
using bio-energy as a main energy supply and more countries particularly those which are land rich
have been adopting bio-energy development plans as of late.

Following the leads of several regional governments, the Government of Cambodia recognising their
countrys oil dependency and indeed risks on importing nearly 100% of its oil for energy use is now
focusing on alternative sources of energy and have now developed their own Bio Energy
Development program by encouraging the greater planting of Sugarcane, Cassava, Palm oil,
Coconuts and Jatropha for feeding various forms of bio-energy.

Biomass
Energy
Domestic Supply
0
0.004
3.620
Imported Supply
1.525
0
0
Total
1.525
0.004
3.620
Table Supply of Primary Energy in Cambodia (2005, million ton COE)
Source
Oil Products
Hydro-Electric
Total
3.624
1.525
5.149

It is forecasted that the oil diesel demand in Cambodia in 2005 was about 524,000 tons as a whole,
and will become 1,237,000 tons in 2020. Within this estimated amount, 387,000 tons are supposed
to be used as a power generation fuel and it is assumed that a portion of this total will be replaced
by biodiesel fuel (BDF). Consequently, it is expected that 671,000 tons of BDF will be required to
cover energy demand of the entire country of Cambodia in 2020.
Bio energy is defined as one important category of renewable energy. It consists of various forms of
energy derived from biomass. Solid biomass covers organic, non-fossil material of biological origin
which may be used as fuel for heat production or electricity generation. Biogas is composed
primarily of methane and carbon dioxide produced by anaerobic digestion of biomass and
combusted to produce heat and power.

The following are some of the positive factors and conditions to be mobilized to promote Bio energy
in Cambodia:

80% of the country is not considered to be under active management
Low cost manpower in cultivating the ground is available, and
Potential exists for developing additional bio fuel crop sources which will bring an incremental
income source for Cambodian farming villages.

With this background knowledge and experience, Prime Asia Group Cambodia is ideally positioned
to develop sustainable bio energy in the outer provinces of Cambodia. The first proposed plant will
provide up to 4 Mw per hour into the local grid and will do so utilising agricultural waste sourced
from local providers with approved allocation to develop up to a total of 3 more similar stations
within the Cambodian provinces.

4

#4 Developing this plan requirements and responsibilities

The operating company will obtain the land allocation for the project under a long term lease at 2$
per sq meter, will also source the granting of the Power Purchase Agreement, known as the PPA.
The by product produced from the gassifaction process will be gas which the operating Company will
negotiate with local importers and arrange for purchases at gate of the project. There will be no
marketing requirements or distribution ( logistics issues ) all income will be paid in US$ cash.

Once confirmation of willingness to confirm funding ability is received the funder will be granted
a stake within the operating company that will be granted the PPA and also receive an equal profit of
all sold by products from the project.

The operating company, once granted the PPA, will be required to hold the land concession for the
project under a 20 year lease arrangement.

The operating company will be incorporated in Cambodia with its Parent Holding Company
in Singapore

All capital returns and subsequent dividends will be paid from Cambodia and be net of any
local taxes

The on shore operating company will install local management to both run the day to day operations
as well as install an overall manager to supervise the operation. We would welcome an expatriate
employee nominated by the funding partner to act in a senior management role.

Cash funding will then need to be transferred by the funder, into an appointed company US dollar
denominated bank account for the initial purchase and transportation of capital goods.

Once the project is live, revenue will start to accrue, the on shore company will then become the
collection agent supplying all documentary paperwork to substantiate costs and revenue.

On shore earnings and the actual contract for the project will be protected at all times from
expropriation / in ability to transfer off shore. The local operating company will be responsible for
risk mitigation products.

Once the initial project is on line and producing, we will make subsequent drawdown on further
funds to build and initiate development for subsequent facilities that under the terms of the PPA
allow us to develop and operate.

We trust this sets out and defines the responsibilities and roles of each party. We look forward to
working with you and assure you of our commitment to project completion and returns as projected
within the document.

The following will set out planning and the benefits that we can contribute into the economy and
the provincial network.

5

Biofuel energy plant development

Practically, the bio-energy project will be coherently developed and organized from plantation,
collection of raw materials, processing, transport and distribution, agricultural training, promotion
and legal framework governing such as land use, specification of mixed fuel, tax and etc. Ideally our
raw material of choice would be agricultural waste which can be readily collected from the array of
farms within the provincial areas.

Supply chain management

Our groups goal is to deliver maximum value to the central power generating company for the least
possible total cost. The supply chain must therefore be built on various players role, i.e. farmers as
raw material producers, the process manufacturer and the supplier of the bio energy. Transparency
and positive contributions to the community are essential. Our team has developed strategic on the
ground relationships and are operating under a fair trade policy with future suppliers, ensuring
we share and develop within the communities that touch into.

Experienced management with such projects

We have secured a strategic relationship with a renowned Bio engineering company in China, this
company has to their name, with a broad array of bio fuel experience and operating experience
throughout Asia Pacific.

Combined with our operating group knowledge and experience throughout the region we have an
operating structure that is focused , transparent and efficient and perfectly positioned to ensure
management from the top down within plantation and operation/retail system in power
generation.

Indirect economic benefits

An inferred benefit from this project, is to be found in maximizing the states opportunity cost
from the available land, which could ultimately provide a significant saving of foreign currency and
extra income to the local communities. Consequently, the following are other economic benefits
when this project is implemented:

The ultimate amount of diesel used can be reduced by introducing extra power market
contributions via bio energy plants; this hopefully, will lead to the decrease of the ultimate
cost of power generation and transportation.
The reliable and cheap supply of energy can surely facilitate the industrial development in
the state.
Job opportunity for local worker is expected in the whole supply chain of BDF production
stage.
The technology transfer is expected through the construction, and it is possible to contribute
to the technology improvement of the state

Environmental Impact of using bio-fuel

Bio-fuels are by its nature very clean because they contain few impurities and due to their oxygen
content they are expected to lead to more complete combustion and lower pollutants emissions.
This is particularly important in developing countries. The environmental effects of bio-fuel in use
thus need to be monitored.

6

There are environmental implications for bio-fuel production. Extending the use of bio-fuel can both
reduce net greenhouse gas emissions and air pollutants such as SOX and CO, etc. The cultivation of
energy crops can also impact on biodiversity, soil and water resources. Though the positive effects of
bio-fuel use is considered greater than the negative aspects, cautious examination is needed to
assess the environmental impact of Bio fuel projects.

Generally speaking, Bio-fuel production project for transport fuel is applicable as a clean
development mechanism CDM project. However, since good methodology to be used for the
project has not yet been approved by CDM Executive Board, no bio-fuel project has been
approved as a qualifying CDM project.

Land useage and availability

In Cambodia, fertile land is mostly used for producing rice, and other non-rice field is used for maze,
mung bean, soybean, cassava and sugar cane. Rubber is also an important crop in eastern Cambodia.
The total cultivated area for rice was 2.3 million ha (MAFF statistics, 2005) out of total agricultural
area of approximately 3.8 million ha.

According to the international agencies (World Bank, UNDP and FAO), 1.25 million ha of land is
potentially available for crops other than rice, and another 2.3 million ha of shrub lands may also
have potential, which indicates an enormous amount of unutilized land.

Fig. Harvest of Different Crops in Cambodia (2003)

As land usage modifies and develops , alternative sources of income for rural poupulations arises
from various land / forest clearance projects which offers income sources such as fire wood,
charcoal and timber as an important source of alternative income other than agricultural resources
for the rural populations that these projects impact.
All said and done, our requirements for the ideal land parcel are as follows:

2 hectares amount of land allocation
Accessible to road network ( tarmac road )
Linkable into the local grid
Ready access to supply of Bio fuel ( no more than 100Km )

7
Clear operating process with the local supplier source that we select as being most efficient
to our project(s), we would also consider placing some of our heavy equipment into the
facility to help their processing quality and quantity.
Land will be leased to the operating group , with all documentation in English

#5 Planning for Funding

We are looking for either equity funding or an outright loan for this project. The following cash flows
will provide payback within the first year after operations commence, will provide positive NPV
and very healthy IRR returns.

Please refer below for further details:

Financial and Economic Analysis of developing Bio fuel power generating plant

The following financial analysis is carried out based on the cost and revenue incurred
from the development project.

The project cost estimation is carried out on the following premises; the following costs are not
incurred:
Environmental Impact Assessment (EIA)
License application fee for project implementation
Compensation for relocation on any related project sites
Import tax of related consumable materials and equipment
Utility service fee during plant construction (electricity and water)
Fuel and electricity for trial operating period

Forecast Data
* Investor Data:
- Capital Investment: Per 4MW generator plant USD $ 2,500,000.00
- Bio Power Capacity: MW Per constructed station
- Agricultural waste consumption: 30,000 MT/ yr.
- Agricultural waste Price:$20$/MT
* Local Data:
- PPA Period: 20 years
- Daily Period: 20-24 hrs
- Electricity Price: $0.20/kwh (Guaranteed from the PPA )

8

Construction Costs

We have estimated the construction costs of the plant:

Construction
Costs
Purchase of Land (leased)
$220,000.00
$200,000.00
$ 60,000.00
$ 200,000.00
$680,000.00
Engineering Cost
Engineering Service
Commercial / political Insurance
Total

REVENUE:
Assumption 1
Data assumption on Biomass
$ per Kwh
0.20
Total Kwh
28,800.00
MWH
1
Total
$ 5,760,000.00

Calculation 2: based on local data consumption.
Assumption 2
Local consumption
$ per Kwh
0.20
Kw total
4,000.00
days
360
hours
20
Total
$ 5,760,000.00
Note - If 18hrs/day consumption then revenue: $5.184
EXPENSES:
Calculation1: 20hrs/day.
Expenses
Totals
Waste @ $20 per MT
$1,040,000.00
52,000
Manpower $ 300 per * 10 pax
$36,000.00
Maintenance 1.5%
$10,200.00,
P /a cost
of construction costs
Total
$1,086,200.00
9

Calculation2 : 18hrs/day.
Expenses
Totals
18 hour day
Waste @$20 per MT
$576,000.00
28,800
Manpower $ 300 * 10 pax
$36,000.00
Maintenance 1.5%
$10,200.00

P/a cost
of construction costs
Total
$622,200.00

MARGIN:
Calculation1.
Margin
20hr day
Revenue
$5,760,000.00
Expenses
$1,086,200.00
Total
$4,673,800.00

Calculation2.
Margin
18 hr day
Revenue
$5,184,000.00
Expenses
$622,200.00
Total
$4,561,800.00

NET MARGIN:
Net Margin
20 hr day
Revenue
$5,760,000.00
5y Amortised Sunk costs and expenses
$1,586,200.00
Total
$4,173,800.00
* note this ignores any income from gas sales which is conservatively forecast at 2million US$ with
no other added expenses.
Calculation 2 .
Net Margin
18 hr day
Revenue
$5,184,000.00
5y Amortised Sunk costs and expenses
$1,122,200.00
Total
$4,061,800.00

10

Year 2 Forecasts:
On Going Costs
Engineering Cost
Engineering Service
Commercial / political Insurance
Total
Costs
$100,000.00
$ 50,000.00
$ 200,000.00
$350,000.00

Revenue
Assumption 1
Data assumption on Biomass
$ per Kwh
0.20
Total Kwh
28,800.00
MWH
1
Total
$ 5,760,000.00

Calculation 2: based on local data consumption.
Assumption 2
Local consumption
$ per Kwh
0.20
Kw total
4,000.00
days
360
hours
20
Total
$ 5,760,000.00
Note - If 18hrs/day consumption then revenue: $5.184
EXPENSES:
Calculation1: 20hrs/day.
Expenses
Waste @ $22 per MT
Totals
24 hour day
$1,232,000.00
56,000
+10% to 22$
$26,400.00
+10% 330$
Maintenance
$10,500.00
estimate against previous year
Total
$1,268,900.00
11

Calculation 2: 18hr/day
Expenses
Waste @ $22/MT
Maintenance
Total
Totals
18 hour day
$1,029,600.00
46,800
+10%
$39,600.00
+10%
$10,500.00
estimate against previous year
$1,079,700.00

MARGIN:
Calculation1.
Margin
20 hr day
Revenue
$5,760,000.00
Expenses
$1,268,900.00
Total
$4,491,100.00

Calculation2.
Margin
18 hr day
Revenue
$5,184,000.00
Expenses
$1,079,700.00
Total
$4,104,300.00

NET MARGIN:
Net Margin
20 hr day
$ 5,760,000.00
Revenue
$350,000.00
On-going costs
$ 5,410,000.00
Total
Calculation 2 .
Net Margin
18 hr day
$ 5,184,000.00
Revenue
$ 350,000.00
On-going costs
$ 4,834,000.00
Total

12

After adjustments for cost increases with fixed PPA revenue total net margin under scenarios one
and two still both indicate strong financial returns we have assumed initial equity investment being
repaid in the first year after commencement of operations. However, we will most likely chose to
depreciate the capital expenditure over the frst 5 years. Please note the PPA guarantees prices fixed
for the first five years of operation.
Taxes

Import Tax for machinery and equipments to be used for the construction is deemed to be
exempted. The VAT shall be also exempted.

Depreciation

Depreciation period:
5 years - Selection of depreciation method:
Assume the salvage value of the total initial investment will become 0 (null) in 5 years, and the value
redeemed evenly. ( estimate 10 year life is more likely ).

13


References

1. All capital expenditure data has been sourced from similar such Bio energy projects such as
the Pepsi cola sponsored Bio energy development in the Philippines.
2. Forecasts have been based upon known power purchase levels within Cambodia.
3. Background data has been gathered from ADB alternative power development research
papers.
4. Clean Biz Asia has also been used as a reference source for data and background
information.

#6 Appendix

#1 <http://www.phnompenhpost.com/index.php/2012101059210/Business/renewable-energy-used-for-
rice-milling.html>
Wednesday, 10 October 2012 Rann Reuy

The Federation of Cambodian Rice Millers Association in Battambang province will establish a
biomass-generated electricity plant in Battambang, an insider said. The plant will cost up to US$10
million and generate 10 megatwatts of electricity.

Phou Puy, president of the Federation of Cambodian Rice Millers Association (CRMA) and the
Baitong Rice Export Company, said he is scheduled to sign a contract with a Malaysian firm in the
upcoming days to set up the power plant operated by biomass from rice husks for generating the
power.

Yesterday Phou Puy, who did not remember the name of the Malaysian firm, confirmed that the
biomass generator was a project being completed in cooperation between his company and a
Malaysian firm.

We are preparing to sign a contract with each other. The plant is worth $10 million with the
capacity to generate 10 megawatts, he said.

Phou Puy said the intention of creating the plant is to cut the cost of processing milled rice to
enhance the competition capacity in the market and use thousands of tonnes of rice husks which are
otherwise useless.

It is important to reduce the cost of producing milled rice for export, we will save some money by
using rice husks that would normally be poured into the ponds uselessly, he said. Were
establishing the biomass plant for use in our rice milling factory, and for supplying electricity to our
federation members. It could be ready in late 2013 or in early 2014.

Victor Jona, Deputy Director General at the Department of Energy in the Ministry of Industry, Mines
and Energy, said officials did not yet have official statistics of biomass generators in Cambodia, but
the trends for establishment of these machines have been increasing at rice milling sites because the
owners want to use rice husks to generate electricity.

He said in the next year, a 26-megawatt power plant would also start operating in a sugar-cane
production factory in Kratie province.

He added that the government encourages the establishment of renewable plants through not
applying import taxes on materials used to build them.
#2 <http://www.cleanbiz.asia/news/cambodia-rice-husk-biomass-energy-project-signs-ge#>

14


US-listed GE has revealed that the SOMA Group is to use GEs Waukesha gas engine technology to
power a new rural, rice husk biomass-energy project.

The project is Cambodias first integrated biomass gasification-gas engine solution designed to
supply renewable electricity to the local grid in support of the countrys Cambodia Rice Husk
Biomass-Energy Project rural electrification goals.

SOMA, a leading Cambodian industrial conglomerate, and GE signed the contract during a US-ASEAN
Business Council (USABC) and US Chamber of Commerce-sponsored forum in the city of Siem Reap
in northwestern Cambodia. Ministry level officials from the US and Cambodia were both present at
the signing.

The Hak Se mill biomass gasification project is in the countrys rural rice milling region of Kamphong
Cham and will be developed by Ankur Scientific Energy Technologies a technology company in
renewable energy technologies based in India.

The rice husk will be converted into biogas, which then will be used in two GE VHP 5904 Waukesha
engines to generate a total of a 1.5 megawatt (MW) of renewable electricity. Part of the power will
support the rice mills operations while surplus electricity will be sold to the local grid. The new
power plant is expected to begin commercial service in March 2013.

By recycling rice mill waste into biogas to support the local grid, the SOMA Group project is
supporting Cambodias Rural Electrification Program that seeks to supply electricity to every village
by 2020 and to connect 70 percent of the countrys households to the grid by 2030. Currently, only
50 percent of rural villages have access to electricity with demands for power growing at 25 percent
a year.

The deal is the first since GE and the Cambodian government signed a 2011 alternative energy
development agreement to identify opportunities to use GEs technology to meet the countrys
energy challenges.

Biomass in the Philippines
# 3 <http://www.cleanbiz.asia/news/philippines-looks-rice-biomass-source-energy#>
DP CleanTech, a Chinese biomass and waste-to-energy business, won a contract to build a facility in
the Philippines that will use rice husk, rice straw and woodchips to produce
power, Bloomberg reports. DP CleanTech will build the 12-MW power plant for AseaOne Power
Corp., the Beijing-based company said today in an e-mailed statement. The value of the contract
wasnt disclosed. Construction of the plant in the Aklan province is expected to start in October and
it may begin working in April 2014, according to the statement.Key
#7 Team Members Bio Data
Our lead Project Manager
A High-Tech enterprise with more than 10 patents, specializing in researching, developing,
manufacturing, selling green energy products and selling biomass gas. The group has accumulated
considerable experience in R&D within the renewable energy sector. Experienced within biomass
energy produced from rice husk , palm shell, wheat straw, cotton stalk, bagasse, wood chip and even
sludge.
Our lead engineering partners

15

Our lead engineers have extensive power industry experience throughout central Asia and Africa.
The group are experienced with operational management in the growing economies of the world
and bring with them seasoned professionals within the group.
Specialties
Experienced in development of power projects,
Renewable energy knowledge and applications
Hard commodity markets such as the oil industry.

Our lead Coordinator
An MBA graduate with extensive Asia Pacific experience within the AsiaPacific region. He has held
strategic management positions throughout the Asia Pacific region and over this time has developed
and maintained strong contacts and references within the business community.

Specialties
Identification of strategic business alliances

Subsequent project management
Identification and management of inherent project / financial risks
Information technology
Business intelligence
Our combined team tenor within this area affords the project host as well as the financing party well
over 50 years of total project and product experience.
Site pictures for one of the Diesel powered generators that will be taken off line under this project:
16
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Introduction

Fig. Harvest of Different Crops in Cambodia (2003)

Waste @ $20 per MT

Manpower $ 300 per * 10 pax

Waste @$20 per MT

Manpower $ 300 * 10 pax

5y Amortised Sunk costs and expenses

Manpower $ 330 * 10 pax

estimate against previous year

estimate against previous year

One Asia Group Pte Ltd

One Asia Group Pte Ltd

Identification of strategic business alliances

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