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Construction of 7.2 MW Thermal Power Plant operating on sunflower husks

Kiev, 2018

Developer : Energain LLC

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Name of the project: Construction of 7,2 MW Thermal Power Plant using sunflower seeds husk

Initiator of the project: Energain LLC - special project company

Project description Thermal Power Plant (TPP) operates on sunflower seeds husk and produce electricity which

will be supplied into the network of the wholesale electricity market and sold at the "green"tarif

The fuel for the TPP will be the sunflower seeds husk which is formed as a result of theprocessing of sunflower seed oil extraction at the neighbouring plant:

1) Allseeds ≈ 10 km2) Delta Wilmar ≈ 4 km3) Odessa Oil Extraction Plan ≈ 20 km4) ADM (Illichevsky Oil Extraction Plant) ≈ 60 km Bunge ≈ 80 km Sanpro Trading≈ 80 km

The Contract for the husk supply between Energain and Allseeds Group has been signed for theperiod up to 31/01/2025.

The total fuel demand for the TPP is 49 500 tons per year

Project General Description

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Facility location: Komunalna St., Yuzhne, Odessa region, Ukraine.

The 7.2 Mwe TPP operating on sunflower husk will be constructed in the close proximity to the oil-extracting plant of Allseeds and Delta Wilmar Group companies

Location of facility

Project General Description

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general layout

Project General Description

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Initiator of the project: Energain LLC is a specialized company that will perform as a customer ofthe thermal power plant for the production and the sale of the electricity to the Energy Market bythe "green" tariff.The company is located at: Ukraine, 04080, Kyiv, Kostiantynivska St. 72

Director: Oleksander Kisilov

Energain LLC%

Founder: Anteliko BDC (Estonia) 100.0

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Project company

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Project company

Diagram ownership and financing structure

DirectorИчаджик Виктория Александровна

EQUITY 8.0 mln. Euro

CREDIT

EBRDBoard of directors

Chairman:Goraychuk Anatoliy

12.6 mln. Euro

Anteliko Group (Estonia)

Shareholder Energain LLC - 100%

Energain LLC

LOGOPlanned capacity and energy production

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Project performance indicators:PRODUCTION 0 YearFuel consumption rate, t/h 6,3 Fuel consumption vs max rate, %delivery of thermal energy in the form of steam, Gcal/h - Тепловая нагрузка от проектной, % fuel value, Kkal/кг 3 800 power generation efficiency 30,1% boiler efficiency 85%fuel energy, Gcal/h 24 quantity of thermal energy on the turbine, Gcal/h 20,3 Output energy capacity, МW 7,1 working time fund 7 920 coefficient of loading, % 0,0%

Article title Value UnitsSpecifications

Production capacity (electricity) 7,2 MWeQuantity of hours worked per year 7920 hour«Green» tariff for energy from

biomass without VAT 0,124 EUR / kW*h

The cost of 1 ton of raw materials, excluding VAT 30 EUR/tonThe volume of raw material per hour 6,25 t/hourThe annual volume of raw materials 50 000 t/year

The total cost of the projectThe total cost of the project 20.6 mln. EUR

Terms of financingLoan terms of EBRD 10 yearThe grace period for the payment of the loan to the EBRD 2 year

The amount of credit EBRD 12.6 mln. EURKey Performance Indicators of the Project

Discount rate 14% %NPV (15) 10.5 ths EURInternal rate of return, IRR 25.1 %

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Cash flow analysis

0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 YearTotal Cash Flow - 3 726 1 238 1 485 1 623 1 740 1 842 1 954 4 422 4 405 4 389 Beginning Cash - - 3 726 4 964 6 449 8 072 9 812 11 654 13 609 18 030 22 435 Ending Cash - 3 726 4 964 6 449 8 072 9 812 11 654 13 609 18 030 22 435 26 824 Equity calcs (3 136) 3 726 4 964 6 449 8 072 9 812 11 654 13 609 18 030 22 435 26 824

0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year volume of sales of electricity, ths kWh - 50 979 54 199 55 825 55 825 55 825 55 825 55 825 55 825 55 825 55 825 volume of sales of heat,Gcal - - - - - - - - - - - fuel amount, т/year - 45 031 47 875 49 311 49 311 49 311 49 311 49 311 49 311 49 311 49 311

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Strengths

The close proximity to the sources of fuel100% sale of the produced electrical energy at thewholesale market of Ukraine

Compliance of the project with the environmentalrequirements and state priorities

Opportunities

Obtaining of 5% premium to the "green" tariff forthe use in the project at least 30% of localcontent

Construction of the second stage of the TPP after the construction of the second stage of oil extraction plant (plus 150 tons of husk per day)

Weaknesses

The relatively high investment costsThe dependence on the level of the payment for electricity sold to the Energy Market

Threats

Reduction of the "green tariff" rate by the State

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SWOT analysis

LOGO3. ТЕХНОЛОГИЧЕСКИЕ РЕШЕНИЯ

The structure of biomass conversion to the electricity

Technology description

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The direct burning of the biomass is the most common method of power generation. The biomassis burned to produce steam which rotates a turbine generating the electricity. The overview ofthe main components of the power generation facility using biomass is provided below in theflowchart.

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Raw material supply to the boiler

Warehouse equipment type "live bottom" allows to unloading raw materials directly to the fuelsupply scraper. It provides accumulation and fuel supply to the conveyor which transports thefuel into the storage tank furnace. It is planned to install iron catcher. Due to that the possibilityof damage equipment by foreign objects would be prevented what will extend the lifetime of theequipment.

Stones, metal and other foreign objects that are notthe fuel, will be collected in the ash handling systemand removed with the ash.The design of the fuel system ensures the availabilityof the equipment for loading and pouring fuel andprevents build-up of fuel and hang it. Also, ifnecessary, dust control devices and systems andexhaust systems can be installed.

Electric power supply of drives is 0.4 kW.

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Technology description

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Automatic Process Control System

APCS TP is designed to provide a stable operating parameters of the boiler auxiliaryequipment, running on solid fuel, storage equipment and ash handling system equipment.

APCS TP controls the following processes:• the fuel supply from the warehouse to the conveyor;• fuel supply by the conveyor to the furnace storage bin;• loading of fuel into the furnace;• adjustment of the power of boiler or dryer settings;• air negative pressure is maintained in the furnace;• removing the ashes from the furnace and its removal intothe container;• the water level control in the boiler;• power control operation of the furnace on the setparameters;• the safety of the boiler, according to the technicalrequirements of the operation;• Start and stop the burning process.

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Technology description

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The organizational structure of the project

Project structure

LLC "Energain

EPC Contractor

SUPPLIERS

Boiler

Turbogenerator

Cooling towers

CONSULTANTS AND EXPERTS

GENERAL DESIGNER

Supporting equipment

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Project implementation

Permissions. Obtaining of the "green tariff". At the stage of the development of engineeringdocumentation for the TPP it is necessary to obtain all the technical conditions for the connectionof the electrical power station to the utility networks (power issue into the power grid, watersupply and sewerage, MES, SES, and others).An important document is a civil engineering permission, which reception gives the right toperform construction and installation works.The civil engineering permission will be obtained in accordance with applicable law upon passingthe examination of project documentation (stage "P").At the stage of the construction of the TPP also are formalized permissions for water consumption(if necessary), waste, emissions, as well as permission of the State Industrial Authority for theexecution of works and the operation. In addition, as the main thermoelectric power stationequipment is the equipment with increased risk, it will be registered in the boiler inspection(boiler, steam pipes, crane, etc.)

Project characteristics

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Organization of the project implementation

Project. According to the current Ukrainian legal framework of such project, the TPP refers to the4th category of building complexity.So the engineering of the facility should be run in three stages:1- Stage of "feasibility study"; 2- Stage "P"; 3- Stage «R".The Project documentation of the feasibility study and Stage "P" must pass a comprehensive stateexamination. The Development of engineering documentation of stage “R" is performed on thebasis of the approved Stage "P" and is scheduled for the execution in parallel with the constructionof thermal power station.Supply of equipment and materials. One of the most time-consuming processes is themanufacture of main TPP equipment (boilers, turbines, cooling towers). Considering this fact, inorder to minimize the construction period first of all it is necessary to ensure the supply ofequipment to the site of the main power plant. Supplying of auxiliary equipment for the TPP, aswell as materials for construction, will be based on the needs of the construction in accordancewith the construction schedule.Construction, installation and commissioning will be carried out on the basis of the developedengineering documentation. In accordance with the construction schedule first construction worksfor buildings and power plants will be performed which should be completed by the time of themain equipment arrival to the site. Installation of main equipment of thermal power station willbe carried out in accordance with the construction schedule under the supervision of the chiefrepresentatives of the relevant manufacturers.

Project characteristics

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The adopted law #2010-d included a whole range of qualitative changes in the existing mechanismof the State support for renewable energy: The definition of economically justified level "green" tariff for the electricity generated from

the alternative sources of energy – namely from biomass and biogas, the "green" tariff is set atthe level for the current power facilities commissioned and is equal to 12,38 eurocents / kWh;

According to the "Green" tariff law the produced electric energy will be redeemed at the wholevolume excluding the electricity consumed for the own needs of the electric power industryfacility;

In order to ensure the investment attractiveness of the sector of renewable energy the "green"tariff is fixed in euro: the binding values of "green" tariff to the euro will be valid until the endof the term of the "green" tariffs actions, but will not apply to electric power facilitiescommissioned after January 1, 2025. Fixed minimum size of the "green" tariff rate credited ona quarterly basis in the national currency at the average official exchange rate of the NationalBank of Ukraine for the last 30 calendar days preceding the date of such meeting;

The surplus to the "green" tariff for the use of locally produced equipment will be installed atthe level 5% for 30% Ukrainian component and 10% for 50% Ukrainian component.

Background of the Project

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Analysis of the legal framework