Under this model, Vuselela Energy will co-invest in the equity of the SPV in return for a share in the dividends as well as the CERs earned from the establishment of the plant. A special purpose vehicle (SPV) will be incorporated as the owner of the co-generation plant.
Vuselela Energy and the project host will be co-participants and co-investors in the operating entity and will each provide their respective proportions of capital required for their equity share in establishment of the plant.
Vuselela and the project host will share all risk in and revenue from both electricity and CER sales in proportion to their respective shareholding in the SPV.
Features of the Co-Investment model include:
- Vuselela will be appointed as the SPV’s owner’s engineer and will procure engineering services from external EPCM contractors.
- Land and utilities will be made available to the SPV at zero cost.
- An “over-the-fence” supply of waste energy will be provided to the SPV at zero cost.
- The electricity generated by the SPV will be supplied to the project host at a competitive rate as a quid pro quo for the free supply of waste energy.
- CERs will be shared between Vuselela and the project host in relation to their shareholding of the SPV.
- Vuselela will assume full responsibility for carbon asset management activities for the duration of the crediting period.
- Implementation and operation will be entrusted to Vuselela Energy on a remunerated basis.