Israeli company Blue Sphere Corp., which describes itself as a clean energy project integrator, has received a signed term sheet from an environmental finance fund to provide $7.5 million in equity financing for the company’s Charlotte, N.C., organics-to-energy anaerobic digester project.
The deal follows the company receiving an earlier commitment letter from Caterpillar Financial Services Corp., Peoria, Ill., to provide Blue Sphere with $17.785 million in debt financing. With the two commitment letters the project is fully financed, says Blue Sphere.
Blue Sphere, along with Biogas Nord AG of Germany, is acting as the integrator of the Charlotte project through its joint venture company known as Bino Sphere. Biogas Nord has designed and built close to 400 waste-to-energy plants in Europe, Africa and the Middle East. With financing committed, Blue Sphere says it is in the process of completing all closing conditions, including investment tax credit monetization, feedstock supply and permits.
Blue Sphere expects to break ground on the Charlotte project by the third quarter of 2013.
“The equity commitment from the fund means that, together with the debt commitment from Caterpillar Financial Services, 100 percent of the project financing is now committed to our 5.2 MW organics-to-energy project,” says Shlomi Palas, CEO of Blue Sphere. “We are now working on finalizing the definitive agreements to begin the disbursement of cash and commence construction. We are required to close the equity financing by the beginning of September 2013.
“Commencement of construction will allow Blue Sphere to begin earning revenue pursuant to the terms of our joint venture with Biogas Nord,” Palas continues. “Once the project is commissioned, approximately 12 months from the start of construction, Blue Sphere will earn operating revenue from the sale of contracted electricity into the local grid owned by Duke Energy, Inc., tipping fees for the organic waste the project will receive, as well as ongoing management fees.”
Palas added that Blue Sphere is also making progress on the implementation of its second project, a 3.2 MW organics-to-energy anaerobic digester project in Rhode Island. Blue Sphere could break ground on that project by the end of 2013, said Palas.