Asset Introduction

Hello friends, my name is Elizabeth. I’m happy to join the Centrifuge community. I’ve been dabbling in the crypto space for a while now, from mining to ICO to masternodes, and now as a blockchain liaison for startup companies bringing their commercial operations on-chain and in the process access liquidity for these innovative new technologies. I believe in PoS and will keep looking for opportunities to stake real-world assets.

I’m working with REI Global to bring decentralized financing to larger renewable infrastructure projects. The first of which is a 25 TPD highly efficient plastic to Syngas facility. (Any type of plastic) All contracts and data relating to the asset will be on-chain from funding, procurement, processing, and distribution of the high-grade low carbon Syngas. REI is a development, construction, operation company bringing innovative renewable energy technologies into commercial operations. Part of the JV includes an agreement to build 5 plants in Central Philippines and process 240k ton a day of plastic into Synthetic diesel.

I look forward to interacting with the community.

Best,

Elizabeth

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Hi @El1748eth,

Great to have you here and thanks for introducing the project. Can you elaborate a bit more on the process of a standard development? What I understand is that you are managing the development of waste-to-energy-plants and want to source (part of the) funding through DeFi. And this is one of many projects that you have in your pipeline. How do you currently finance these types of projects and based on what do your traditional funders determine the rates?

Hi Lea, thanks for the warm welcome. It is exciting to see how decentralized finance is quickly changing. I look forward to discussing with the community the many benefits DEFI can have on previously traditionally funded sustainable infrastructure projects.

Let’s start with the financial questions…

How do you currently finance these types of projects?

REI creates an SPV (Special Purpose Vehicle) for each of the projects. Where the Investment is secured by Project assets, we then arrange junior to Project senior debt. The project is a long-lived asset, lasting 20++ years, that will be financed and paid for over ~4 years, resulting in large residual values. Maintenance of project asset values and system performance is budgeted and provided for during operations REI Global, with its partners, provide best in class management, operations, and risk management services. We intend to promote the development of our Plastic to Syngas technologies as a new asset class adding value to investors across a broad spectrum of opportunities and geographies.

How do traditional funders determine the rates?

Traditionally the financing rate varies based on foreign investment and local debt rates. The Philippines has a strong regulatory and legal framework supporting renewable energy and international investment. Macro-economic conditions are favorable. The PHP/USD exchange rate has been relatively stable in recent years. The underwriting of the project determines the required equity investment. If underwriting for example requires the SPV to deposit 30% to facilitate the debt contract. REI would raise the amount through syndication partners that would take the equity position alongside REI.

As for REI’s typical development process? It goes through a detailed SOP but here are the main points and I’ve also included where the Syngas project stands in the development phase.

Observe an energy/ waste problem

The Philippines government has mandated the Philippine National Oil Company (PNOC) to provide affordable fuel for the country.

It’s clear that recycling is not working and requires cutting edge solution. Plastics from 3-7 categories are generally tougher to recycle and for the most part not recycled at all. Our pyrolysis system that converts plastic to SYNGAS system is the highest quality combustion equipment with the lowest emissions (BACT) and the highest efficiency level in the world at the present time.

Find technology, design a sustainable solution, and validate it.

The Pyrolysis technology or Plastic to Syngas system that will be used in this project has been perfected and installed in 25 sites globally and REI has written various white papers using diverse input data to validate its effectiveness.

Joint Venture with a field partner

JV partners are found through the trade commissioner of Canada or the United States. These government agencies then validate corporations based on project success.

Financial projection

REI’s performance model has been used for a variety of projects and been vetted by qualified financial modelers.

The product is a premium diesel. Our financial model is modeled conservatively to determine the viability of the project and our threshold of the plus/minus. Our intention is to capitalize on a much higher price once we negotiate the long term supply contract. Diesel is always going to sell, unlike other commodities.

This project has an IRR of 25.87% with a payback period within 4 years of a 20-year production contract.

Secure the site and build the facility

Initial funds are raised to secure the site and build the facility or it is part of the JV. Its value is then used as collateral for the project.

Partial finance (the building) has been secured and construction of the building should be finished in the spring. The land asset is valued at $1 million and building at $500,000 to a total of &1.5 million used as initial collateral to start the project.

Currently, the project has a potential large-scale off-taker based on the quality of the fuel produced by the 25 TPD (tons per day) facility.

Also, there is various interest from the private sector that are also interested in the long term supply contract.

I look forward to furthering the discussion.

Best,

Elizabeth