Exampe of Writing Presentation on Case WASTE CONCERN Project

8/6/2019 Exampe of Writing Presentation on Case WASTE CONCERN Project

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We are

Group No:2

Name Roll No.

Tania Rahman 11-101


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Picture behindthe scene

Iftekhar Enayetullah and Maqsood Sinha had earned an international

reputation for their innovative approach to dealing with the vast

quantities of waste that had threatened to overwhelm the overcrowdedcity of Dhaka.


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1. Waste Generation is rapidly

increasing.

2. Waste collection is inadequate.

3. There is a shortage of land for final

disposal of waste.

4. Organic waste is not utilized.

5. Citizens lack the political will to do

something about it.

3000 ton

waste daily

1,400 600 800200

Daily Volume of

Waste(tons)

Daily Volume of Waste(tons)


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Paper

Glass

Metal

Plastic

Textile

Wood/Grass

Ash/Soil

Food Waste

Others

10%

1.40%

0.50%

2.

0%

2.50%

22%

40%

18%

3%

Physical Composition of Solid Waste

Series1

70-75% of waste from

Dhaka city was organic

and suitable for

composting.


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Dhaka City

Corporation, responsible for

enormous amount of waste butonly collected 42% of it each day.

Another 58%...??!!!


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Insufficient instutional

structures.

Inefficient organizationalprocedures.

Use of inappropriate

technologies.

Deficient capacity ofinstitutions involved.

Plays an important role in

SWM especially in resource

recovery. Activities disrupt oparation

of landfills & transfer

stations.

An eyesore & thereforeopposed by authorities.


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Source Segregation of Waste

Vegetables MarketDoor to Door CollectionDoor to Door Collection

Composting

Small Scale/ Medium Scale/ Large Scale

Decentralized Compost Plant

Transfer Stations

Landfill


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Collection of waste

Sorting of waste

Piling of waste using windrow method

Piling of waste using Box method

Turning

Temperature monitoring

Packaging


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Community Response

Sustainability

Positive


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Background asengineer NOT

businessman

Creates problem:

Distribution

Sales

Marketing

Agreement &

Support

Alpha Agro

UNDP(CDM)

Map Agro


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many nations together in 1992to sign the United NationsFramework Convention onClimate Change (UNFCCC).1992

new agreement that wouldestablish legally bindinglimitations on greenhousegases2012

The Kyoto Protocol


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The CDM of the Kyoto Protocol has created opportunities for generating

huge amount of economic and environmental benefits for Bangladesh.

CDM project is implemented with a capacity of composting 700 tons of

waste per day along with a LFG and utilization through its 3 planned recycling

plants with a daily recycling capacity of130 tons

This initiative will also reduce 15,600 tons of CO2 e/year and save 52,195

m3/year area of landfill.

CleanDevelopmentMechanism (CDM)


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Carbon Financing : Carbon CreditsIndustrialized

country

Developing country

Emission reduction

credits (CER)


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Waste

City

Authorities

Collecting

transport

Baseline Situation CDM project

Methane Emission (Green House Gas) No Methane Emission

The project is recycling organic vegetable waste and instead of disposing in

landfill, it is converted into compost.


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Whether or not to enter into a partnership with one of anumber of large foreign firms interested in making a majorinvestment in their growing recycling firm?

Whether Potential investor would be willing to fund only thecomposting plant or whether they might fund the LFG

extraction project as well?

If the LFG composting plant was implemented, what will bethe choice of investors whether to use the processedmethane for power generation or just flare it for same

release into the atmosphere?


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Whether or not to enter into a partnership with one of

a number of large foreign firms interested in making a

major investment in their growing recycling firm


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The Japanese Suitor

The Dutch Suitor


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Initial

Proposal

Purchase years of CERs at approximately US$4.50

each(approximately 80% of 2004s CER value including a

prepayment to get Waste Concerns proposed business off the

ground)


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Sale of Compost

tons of compost generated/day 175

operational days/year 320

tons of compost /year 56,000

US$/tons of compost $43

Annual Revenue from Sale of Compost $2,408,000

Total Annual Revenue $3,362,000

Carbon Credits Generated from Composting

tons of waste sorted/day 700

carbon CreditsGenerated/day 350

operational days/year 320

carbon credits/year 112000

assumed price/carbon credit $4.50

Annual Revenue $504,000

Carbon Credit Generated from LFG Extraction

average carbon credits/year 100,000

assumed price/carbon credit $4.50

Annual Revenue $450,000

Total Annual Revenue from Carbon Credits $954,000


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Room to negotiate credit price.

Offers to be consultantindevelopingnew CER projects which will addpersonalincome as well as revenue forWaste Concern

Advantages

No upfront payments. Didnot matched with Waste Concern's

goal of promoting CDM projectsthroughoutcountry andconvertingwaste into resource to benefit poor.

Problems


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1. The WWR would assume control of the entire dumpsite

operation, helping it to run smoothly and predictably. They would

introduce specialized heavy equipment to improve efficiency end

increase capacity.

2. They would build a power plant for LFG extraction.

3. They would seed a controlling share of the joint venture, typically

80%.

Terms and

Conditions


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-Long record of success andinnovation,contributing anintegrated, end-

to-end process. -Welltechnology,values and reputation.

-Giving up majority ofcontrol.

WWR

Increased offer to $5.00 per credit

Focused on profit.

Didnot matched with Waste Concern's goalJapanese suitor


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Assumptions Royalty to DCC 5%

Depreciation 5%

Discount rate 12%


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year 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Total Income

1,017,553 1,535,122 1,460,441 1,499,255

1,048,37

5

1,005,63

1 705,552 631,330 398,359 242,937 347,823

TOTAL EXPENDITURE235,800 235,800 235,800 235,800 157,200 157,200 78,600 78,600 78,600 78,600

Gross Margin 1,017,553 1,299,322 1,224,641 1,263,455 812,575 848,431 548,352 552,730 319,759 164,337 269,223

Royalty to DCC (5%) 50,878 64,966 61,232 63,173 40,629 42,422 27,418 27,637 15,988 8,217 13,461

EBIT 794,655 1,062,336 991,389 1,028,262 599,926 633,989 348,914 353,074 131,751 (15,900) 83,742Depreciation 172020 172020 172020 172020 172020 172020 172020 172020 172020 172020 172020

EBITDA 966,675 1,234,356 1,163,409 1,200,282 771,946 806,009 520,934 525,094 303,771 156,120 255,762

Unlevered net income 794,655 1,062,336 991,389 1,028,262 599,926 633,989 348,914 353,074 131,751 (15,900) 83,742

Add:Depreciation 172020 172020 172020 172020 172020 172020 172020 172020 172020 172020 172020

Less:CNW 0 71103.05 1919 1940.7 -22544 -2137.2

-

15003.9

5 -3711.1

-

11648.5

5 -7771.1 5244.3

Less:Capital Expenditure 3,096,360 344,040

Net cash flow before debt (2,129,685) 819,213 1,161,490 1,198,342 794,490 808,147 535,938 528,805 315,420 163,891 250,518

NPV 1894644

IRR 40.03%


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Cash Flow Calculation of extraction project (without upfront fee)

year 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Total Income

1,422,061 1,460,441 1,499,255 1,048,375

1,005,63

1 705,552 631,330 398,359 242,937 347,823

TOTAL EXPENDITURE235,800 235,800 235,800 235,800 157,200 157,200 78,600 78,600 78,600 78,600

Gross Margin - 1,186,261 1,224,641 1,263,455 812,575 848,431 548,352 552,730 319,759164,337 269,223

Royalty to DCC (5%) - 71,103 73,022 74,963 52,419 50,282 35,278 31,567 19,918 12,147 17,391

EBIT - 943,138 979,599 1,016,472 588,136 626,129 341,054 349,144 127,821 (19,830) 79,812

Depreciation 172020 172020 172020 172020 172020 172020 172020 172020 172020 172020

EBITDA - 1,115,158 1,151,619 1,188,492 760,156 798,149 513,074 521,164 299,841152,190 251,832

Unlevered net income - 943,138 979,599 1,016,472 588,136 626,129 341,054 349,144 127,821 (19,830) 79,812

Add:Depreciation 172020 172020 172020 172020 172020 172020 172020 172020 172020 172020

Less:CNW 0 71103.05 1919 1940.7 -22544 -2137.2

-

15003.9

5 -3711.1

-

11648.5

5 -7771.1 5244.3

Less:Capital Expenditure 3,096,360 344,040

Net cash flow before

debt(FCF) (3,096,360) 700,015 1,149,700 1,186,552 782,700 800,287 528,078 524,875 311,490 159,961 246,588


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NPV 901005.81

IRR 22.00%


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year 2004 2005 2006 2007 2008 2009 2010 2011 2012

LFG Revenue

1,017,553 1,535,122 1,460,441 1,499,255 1,048,375 1,005,631 705,552 631,330 398,359

Compost Revenue 430000 1075000 2408000 2408000 2408000 2408000 2408000 2408000 2408000

Total Revenue 1,447,553 2,610,122 3,868,441 3,907,255 3,456,375 3,413,631 3,113,5523,039,330

2,806,359

LFG expenditure235800 235,800 235,800 235,800 235,800 157,200 157,200 78,600 78,600

Compost

Expenditure 494520 978270 1978020 1978020 1978020 1978020 1978020 1978020 1978020

Total Expenditure 730320 1214070 2213820 2213820 2213820 2135220 2135220 2056620 2056620

NI 717,233 1,396,052 1,654,621 1,693,435 1,242,555 1,278,411 978,332 982,710 749,739

PV 788956.3 1396052 1654621 1693435 1242555 1278411 978332 982710 749739

NPV 5544411


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Year 2005 2006 2007 2008 2009 2010 2011 2012

LFG Revenue1,422,061 1,460,4411,499,255 1,048,375 1,005,631 705,552 631,330 398,359

Compost Revenue 1075000 2408000 2408000 2408000 2408000 2408000 2408000 2408000

Total Revenue 2,497,061 3,868,441 3,907,255 3,456,375 3,413,631 3,113,552 3,039,330 2,806,359

LFG expenditure235,800 235,800 235,800 235,800 157,200 157,200 78,600 78,600

Compost Expenditure 978270 1978020 1978020 1978020 1978020 1978020 1978020 1978020

Total Expenditure 1214070 2213820 2213820 2213820 2135220 2135220 2056620 2056620

NI 1,282,991 1,654,6211,693,435 1,242,555 1,278,411 978,332 982,710 749,739

PV 1282991 1654621 1693435 1242555 1278411 978332 982710 749739

NPV 4642394


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Combined NPV for WWR 5544411

Combined NPV for Japanese 4642394

4000000

4200000

4400000

4600000

4800000

5000000

5200000

5400000

5600000

Combined NPV with

upfront fee

Combined NPV

without upfront fee


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Whether Potential investor would be willing to fund

only the composting plant or whether they might

fund the LFG extraction project as well


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NPV with only composting plant 479123.63

NPV of composting plant plus LFG

extraction project (without upfront

fee) 1380129

NPV of composting plant plus LFGextraction project (with upfront fee)

6023534.93

NPV of composting plant < NPV ofcomposting plan plus LFG extraction project

Potential investors might fund the

LFG extraction project


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If the LFG composting plant was implemented,

what will be the choice of investors whether to

use the processed methane for power

generation or just flare it for same release into

the atmosphere.


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LFG Extraction Project

Value without electricity

generation

(2545761)


generation

1894644

Investors should choose to use the

processed methane for power

generation


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Waste Concern should enter into a Joint venture with WWR (Dutch Suitor)as major investment partner in their growing recycling firm.

But it should negotiate with the terms and conditions of the proposal aboutcontrolling share of the firm.

Potential investor should invest both in the and LFG extraction project aswell as composting plant.

Investors should choose to use the processed methane for power generation.Because in LFG Extraction Project, value without electricity generation isnegative


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The NPV of combined value of compost plant and LFG is greater with WRR.

Combined NPV for WWR 5544411

Combined NPV for Japanese 4642394

WRR is willing to make an upfront investment as well as contribute its proven

technology, it will cover the need ofWaste concerns initial capital requirement.

WWR contains a long record of success and innovation, contributing anintegrated, end-to-end process.

The goal ofWaste Concern matches with the goal ofWWR


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Potential investor should invest both in the and LFG extraction

project as well as composting plant.NPV of composting plan plus

LFG extraction project is higher than NPV of composting plant

alone.

NPV with only composting plant 479123.63

NPV of composting plant plus LFG

extraction project (without upfront

fee) 1380129NPV of composting plant plus LFG

extraction project (with upfront fee)

6023534.93


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Investors should choose to use the processed methane for

power generation. Because in LFG Extraction Project, valuewithout electricity generation is negative


generation

(2545761)


generation

1894644


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Exampe of Writing Presentation on Case WASTE CONCERN Project