Blue Sphere Corp. said July 16 that its Charlotte, N.C., project, a 5.2 MW organics-to-energy anaerobic digester, has received a signed commitment letter from Caterpillar Financial Services Corp., the financial arm of Caterpillar Inc. (NYSE: CAT).
Caterpillar would provide $17.785m in debt financing. Blue Sphere said it has accepted the commitment letter and has paid a non-refundable commitment fee of $177,852 to Cat Financial. This commitment is 100% of the debt financing required for the project.
Blue Sphere, along with its partner, Biogas Nord AG of Germany, is acting as integrator of the Charlotte project, through its joint venture company, Bino Sphere. Biogas Nord has designed and built over 400 waste-to-energy plants in Europe, Africa and the Middle East.
With the debt financing now committed, Blue Sphere said it is in the process of completing all closing conditions, including investment tax credit monetization, feedstock supply and permits. It expects to break ground in the third quarter. Upon the completion of the Charlotte project, expected in the third quarter of 2014, Blue Sphere will continue as project manager and retain a 37.5% ownership in the project.
Shlomi Palas, CEO of Blue Sphere, said: “Our next step is to prepare and enter into final definitive agreements with Cat Financial to start the disbursement of cash and commence construction. The terms of the commitment letter give us until August 14, 2013 to close. Commencement of construction will, in turn, enable Blue Sphere to begin earning revenue pursuant to the terms of our joint venture with Biogas Nord. Once the project is commissioned, which should take up to 12 months from the start of construction, Blue Sphere will start earning operating and management revenue from the sale of contracted electricity into the local grid owned by Duke Energy, Inc. In parallel, Blue Sphere continues to make progress on the implementation of our second project, a 3.2 MW organics to energy anaerobic digester project in Rhode Island. We expect the second project could begin construction by the end of 2013.”
Blue Sphere is a company in the cleantech sector as a waste-to-energy project integrator.