Fibrominn lands role in country's first large poultry biomass power plant
Subsidiary of Homeland Renewable Energy LLC completes a sale-leaseback and financing agreement with Powerminn 9090 LLC, a Herrick family controlled affiliate, in project to protect groundwater and recycle nutrients; $202 million in debt financing arranged by HH Media LLC and Key Bank subsidiary McDonald Investments Inc. with industry leading institutional investors...
NEW YORK, Dec. 15, 2004 (PRNewswire) -- Homeland Renewable Energy LLC announced that the sale-leaseback and financing for its subsidiary Fibrominn LLC's 55 megawatt poultry-litter-fired power plant in Benson, Minnesota is complete. The Fibrominn project is without equal -- the creation of the country's first large scale poultry-litter power plant with the potential to dramatically and positively alter the future of the agricultural and energy community in Minnesota and other forward looking states.
Rupert Fraser, C.E.O. of Homeland Renewable Energy LLC, said: "We are delighted to be able to announce the completion of the financing portion of this project. It represents the culmination of an enormous amount of hard work by a dedicated team of people, including the City of Benson, our advisers and lawyers, and our own staff. From today onwards, Fibrominn will begin to build a plant which will be part of the Minnesota agricultural community, working with the state's world-leading turkey producers, for a very long time."
The financing has been structured by HH Media as an investment grade vehicle (Fitch Rated BBB-/BB) packaged as a traditional Sale-Leaseback, with PowerMinn 9090, LLC, purchasing the capital plant and leasing it back to Fibrominn, which will manage the construction and operation of the plant, under a long term lease. Six of the leading investing institutions in the power project finance market, led by the Prudential Capital Group and John Hancock Financial Services, have agreed to lend $202 million.
Norton Herrick of PowerMinn Holdings commenting on the closing stated "that this relationship is a coup for my family, the citizens of Benson, Minnesota and for the future of renewable energy in the United States. Our greatest source of inspiration often springs from personal experiences, as individuals and as members of a broader community; we seek to share our enthusiasm for alternative renewable power and the promise of a cleaner tomorrow."
Full Notice to Proceed has today been issued to the turnkey Contractor, SNC-Lavalin of Canada. SNC has already commenced work on the site and it is anticipated that construction and commissioning will last for about 30 months, with initial operation expected to commence in February 2007 (month 26). The plant will generate 55MW, enough power for about 60,000 homes, from a total of about 700,000 tons of biomass fuels, around 90% of which will be poultry litter.
The Fibrominn Project comprises a 55MW electricity generating plant using biomass fuels to produce power. The plant will utilize over 700,000 tons per year of poultry litter and other biomass fuels, producing heat which will generate steam in a boiler to drive a turbine-generator. The process is resource-conserving, since the only by-product is the ash from combustion, which will be marketed as a nutrient-rich fertilizer.
Fibrominn has been developing the project for the last 4 years, during which it has:
* Entered into a 21 year Power Purchase Agreement with Northern States Power.
* Signed a turnkey construction contract with SNC-Lavalin - the plant design is based upon experience at three similar plants developed and operated by Fibrominn's UK shareholder, Fibrowatt Limited, which are the world's first three poultry-litter-fired power plants.
* Signed long term supply agreements with numerous poultry producers, under which the poultry litter required by the plant will be procured.
* Purchased a 77-acre site and certain local utility services from the City of Benson.
Benefits of the project include:
* Production of renewable biomass energy, assisting Northern States Power in meeting its biomass power obligations.
* Providing an alternative use to land application for poultry litter, assisting poultry farmers with the management of their used litter and the associated regulatory obligations for nutrient management.
* Reducing the potential for poultry litter to cause nutrient over-loading in groundwater, which can lead to high levels of phosphorus and nitrates in drinking water, lakes and rivers.
* Recycling of the nutrients in the poultry litter, in the form of the fertilizer derived from the ash resulting from the combustion of the poultry litter.
* Reduction in greenhouse gas production through the displacement of existing fossil-fueled generation by carbon-neutral biomass electricity.
* Providing rural jobs in West Central Minnesota - including highly skilled jobs for operators of the plant and indirect jobs in transportation and support services such as maintenance and engineering.
* Helping protect poultry industry jobs by enhancing the future environmental sustainability of the Minnesota turkey industry.
Fibrominn LLC is wholly owned by Fibrowatt LLC (www.fibrowattusa.com), which in turn is a 70% subsidiary of Homeland Renewable Energy LLC ("HRE"). HRE is a renewable energy development and operating company, which intends to become a leading player in the biomass power marketplace.
HRE intends to pursue the opportunities to build biomass power plants in a number of states, particularly states in which it can use the Fibrowatt poultry-litter-combustion technology, which it licenses from Fibrowatt Ltd of the UK. HRE was founded by a group of private investors, including the co- founders of Fibrowatt Ltd.
Fibrowatt Ltd of the UK pioneered the use of poultry litter to create electricity, building the world's first three such power plants between 1990 and 1998. HRE's Fibrominn project represents the first poultry-litter-fired power plant in the USA, and will form the template for further plants to be built in intensive poultry-growing areas.