1408 Uganda Sugar Proposal Q 1-7-22

Proposal for Sugar Project by House of Dawda

1

Table of Content

................................. ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ............. .. 3 Executive Summary ...................... 1.

2.

3.

4.

5.

Plantation Development ...................... ................................. ...................... ...................... ...................... ...................... ...................... ...................... ...................... ....................4 .........4 1.1.

Overview ...................... ................................. ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... .............. ...5 5

1.2.

Development Strategy ...................... ................................. ...................... ...................... ...................... ...................... ...................... ...................... ...................... ............... ....6 6

1.3.

Cost and Revenues......................... Revenues.................................. ................... ..................... ...................... ...................... ...................... ...................... ...................... .....................8 ..........8

1.4.

Community Community Development Development Initiative.. Initiative...... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ..... ..10 10

Sugar Mill ...................... ................................. ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................11 ........11 1.1

Design................... Design............................ ................... ..................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ............. 12

1.2

Sugar Process........... Process............... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ...... 12

1.3

Major Plant Plant Equipm Equipment ent & Technolo Technological gical Options Options ........ ........... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... .......14 ....14

1.4

Performance Performance Parameters of Sugar Mill...... Mill.......... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... .......18 ....18

1.5

Cost ...................... ................................. ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ....................19 .........19

Cogeneration Power Plant ...................... ................................. ...................... ...................... ...................... ...................... ...................... ...................... ...................... ............... ....20 20 2.1

Design................... Design............................ ................... ..................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ............. 21

2.2

Cost ...................... ................................. ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ....................24 .........24

Distillery ...................... ................................. ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... .....................25 ..........25 4.1

Design................... Design............................ ................... ..................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ............. 26

4.2

Cost ...................... ................................. ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ....................28 .........28

Indicative Financials and Deal Structure........... Structure ...................... ...................... ...................... ...................... ...................... ...................... ...................... ................ .....29 29 5.1

Project Cost.......... Cost............. ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ......30 ..30

5.2

Means of Finance....... Finance........... ........ ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ......31 ..31

5.3

Integrated Integrated Project Project Financial Financialss ........ ........... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ......32 ...32

1

Table of Content

................................. ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ............. .. 3 Executive Summary ...................... 1.

2.

3.

4.

5.

Plantation Development ...................... ................................. ...................... ...................... ...................... ...................... ...................... ...................... ...................... ....................4 .........4 1.1.

Overview ...................... ................................. ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... .............. ...5 5

1.2.

Development Strategy ...................... ................................. ...................... ...................... ...................... ...................... ...................... ...................... ...................... ............... ....6 6

1.3.

Cost and Revenues......................... Revenues.................................. ................... ..................... ...................... ...................... ...................... ...................... ...................... .....................8 ..........8

1.4.

Community Community Development Development Initiative.. Initiative...... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ..... ..10 10

Sugar Mill ...................... ................................. ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................11 ........11 1.1

Design................... Design............................ ................... ..................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ............. 12

1.2

Sugar Process........... Process............... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ...... 12

1.3

Major Plant Plant Equipm Equipment ent & Technolo Technological gical Options Options ........ ........... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... .......14 ....14

1.4

Performance Performance Parameters of Sugar Mill...... Mill.......... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... .......18 ....18

1.5

Cost ...................... ................................. ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ....................19 .........19

Cogeneration Power Plant ...................... ................................. ...................... ...................... ...................... ...................... ...................... ...................... ...................... ............... ....20 20 2.1

Design................... Design............................ ................... ..................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ............. 21

2.2

Cost ...................... ................................. ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ....................24 .........24

Distillery ...................... ................................. ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... .....................25 ..........25 4.1

Design................... Design............................ ................... ..................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ............. 26

4.2

Cost ...................... ................................. ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ...................... ....................28 .........28

Indicative Financials and Deal Structure........... Structure ...................... ...................... ...................... ...................... ...................... ...................... ...................... ................ .....29 29 5.1

Project Cost.......... Cost............. ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ......30 ..30

5.2

Means of Finance....... Finance........... ........ ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ......31 ..31

5.3

Integrated Integrated Project Project Financial Financialss ........ ........... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ....... ........ ....... ......32 ...32

Executive Summary The House of Dawda plans to develop up to 12,000 hectares of fertile land in Uganda, which is suitable for sugar cane cultivation as well as other crops. The client wishes to establish a sugar cane plantation, sugar mill, power plant and distillery in order to optimize land usage. Currently, the land is under thick bush and the planned project includes clearing the entire land area and raising the sugarcane and an inter-crop to achieve stable yields at the end of three years. Construction of the mill, power plant and distillery will start in parallel and the commissioning is to coincide with the plantation plantation achieving a stable stable output. Proposes to carry out a detailed feasibility study to assess the various various aspects of the entire project and prepare detailed implementation plans for the plantation, mill, distillery and power plant. Based on on an initial initial understand understanding, ing, the entire entire plantation plantation develop development ment should should be done in 3 phases phases - 100 to 125 125 Ha (Phase (Phase 1), 1), 1000 Ha (Phase (Phase 2) and 8000 8000 Ha (Phase (Phase 3) to gradu gradually ally increase the cultivated area and develop seeding capacities. Corresponding to the cane availabilit availabilityy a 2500 TCD, 45 ICUMSA ICUMSA sugar mill mill which shall shall be expandable expandable to 4000 TCD, TCD, an 18 MW power plant plant and a 40 klpd distillery should be installed. The production of sugar and and other resulting by-products align with the Client’s booming FMCG business and the consequent inhouse requirement of 55,000 T per annum of 45 ICUMSA sugar. Uganda is power deficit and the renewable power from the proposed power plant presents an opportunity to improve the power situation. The project is planned to have positive social, cultural and economic impact on the local communities and farmers. The entire project is expected to cost USD 125 MN in the base case and is expected to be financed at a debt equity ratio of 3:1. As land would be contributed in the form of equity, the equity investment required in cash would be USD 6.0 MN. The expected equity IRR from the project is in excess of 28%. The remainder remainder of this documen documentt describes describes our initial initial understa understandin nding g of the Project Project and the scope of work to prepare a detailed implementation plan.

1. Plantation Development 

Overview The sugar cane plantation is one of the key parts of the entire project and one on which the success of the entire project hinges. Sugar cane is a complex crop exhibiting intricate patterns in terms of yield, quality, maturity time, disease resistance and water requirement. Being a subtropical crop that undergoes vegetative propagation, the plantation performance will be dependent on temperatures, rainfall, weather cyclicality and soil type. Sugar cane performs best when there is no water logging and the local weather has a distinct winter season at the time of harvesting. Each hectare of plantation requires 6-7 tonnes of seed. The sugar cane seed is a small piece of  stem taken from an 8-10 month old sugar cane plant. The entire 8000 hectare land area would hence require around 48,000 tonnes of seed. At full scale, the plantation will have a work force of up to 20,000 workers and large inventory of farm equipment. Clearing the land initially and preparing it for farming would require significant effort and would take around a year to clear depending on the resources mobilized. The plantation will have to be structured and planned in such a way that the right ratoon mix is available when the mill, power plant and distillery become operational. The entire plantation will take around three years to develop and mature. The plantation strategy that is developed should include the following aspects: 

The capital requirement for the plantation activity should be minimized.



If possible, there should be a source of cash flows in the interim period while the land is cleared and the plantation is being developed.



The timing of the first harvest from the fully developed plantation should coincide with commercial operations date of the mill.



The varieties chosen must be optimized from the maturity, cane yield, sugar yield and disease resistance perspectives.



The best agricultural practices should be incorporated, and agricultural research capability should be built.



Local resources should be trained and developed to maximize employment opportunities and accelerate local economic development in Uganda.

1.1.Development Strategy WE proposes to develop the entire plantation in phases and build up capacities in such a way that each of the critical issues is addressed. The phased approach would minimize the upfront requirement of capital and also enable an interim cash flow by utilizing the cleared land for alternate crops e.g. potatoes, sunflower etc, and for inter-cropping. Inter-cropping basically involves simultaneous plantation of another crop along with sugar cane. The inter-crop is usually smaller in height and is either capable of fixing nitrogen in the soil or at least is less nitrogen intensive, thus complementing a nitrogen intensive crop like sugar cane. The distance between two rows of sugar cane is ideally around 4 feet and the intermediate space can be used for the development of the inter-crop. There are various intercropping options for sugar cane which include wheat, soyabean, lentils, potato, maize and other vegetable crops. There may also be more exotic high value crops (such as medicinal herbs), which would be identified and assessed in the feasibility stage. The complete plantation would require about 48000 tonnes of seed (6 tonnes / hectare). It would be logistically difficult to import / source this quantum of seeds from external sources. Each hectare of 8-10 month old sugar cane can provide seeds for another 10 hectares of land. In the phased implementation approach, with an expansion factor of 8-10x, the entire plantation can be initiated by sourcing a manageable 750 tonnes of seed. The mill, power plant and distillery would need about 2 years to implement. WE anticipates commencement of construction of these at the end of the first year. In the three-phase development, it would take approximately three years to produce the first full yield of  sugarcane on the entire plantation. Thus the phased approach would result in the plantation generating the first full crop coincident with the commissioning of the other parts of the project. Based on above considerations, WE proposes to implement the plantation in 3 phases, each of  approximately 1 year duration.

Phase 1: In phase 1 around 100-125 hectares of land will be cleared and the sugar cane will be planted. The seed for this phase (around 600 – 750 tonnes) would be either procured locally or imported based on optimum variety suitable for the site, the quarantine/import restrictions, and cost considerations. The clearing and planting in the 100-125 hectares would be done as soon as the Client gives a go ahead for the project and makes the land available. The right intercrop based on the local climatic conditions, soil type, maturity period and market rates would also be planted along with the sugar cane to establish cash flows and recoup some of the investment. Once financial closure is achieved (in about 4-5 months), another 900 hectares of land required for plantation in phase 2, would be cleared. Alternate crops of shorter maturity cycle would be planted as and when the land becomes available for agriculture. This phase shall also include standardization of agronomic practices, man power training and computerization of the cane management system. Phase 2: Phase 2 would involve sugarcane plantation on 1000 hectares (including the land planted in phase 1). The sugarcane harvested from phase 1 would be used for seeding in phase 2. The inter-cropping strategy explained in phase 1 would be replicated in phase 2. In this phase the remaining 7000 hectares of land would be cleared. Alternate cropping strategy for this additional land would be followed. Phase 3: In phase 3, sugar cane would be planted on the 8000 hectares using the seed from phase 2. Inter-cropping would be carried out. At the end of this phase the entire plantation would be developed and the first full crop would be ready for harvesting.

The following is the cultivation plan for the plantation:

   x    0    1      8

   r    Y    1

   r    Y    1

   r    Y    1

   x    0    1      8

8000 Ha

1000 Ha

100-125 Ha

1.2.Cost and Revenues The plantation economics in the development phase revolve around the choice and realization from the inter-crop. Apart from the agro-climatic feasibility of each option, the commercial viability of the crop and its demand in the local scenario will affect the cash flows from the land. A rough estimate of the revenues from inter-cropping is USD 2500/Ha/year. This will be verified and pinpointed more accurately in the feasibility study. Land clearing and development will cost approximately USD 1000/Ha. Land development shall include leveling, fencing and construction of preliminary irrigation infrastructure. A suitable gradient is required to facilitate land drainage and irrigation. The cost of planting cane is expected to be around USD 1150/Ha. Cane planting cost includes cost of seeds, fertilizer, manpower, electricity and other expenses in raising the crop. The cost of planting the inter-crop is expected to be also around USD 1150/Ha and includes the cost of seeds, fertilizer, manpower, electricity and other expenses.

An indicative financial estimate of the plantation is shown below. These figures are preliminary and more accurate figures will be developed post assessment of the site and local conditions:

Phase 1 - 125 Ha

Phase 2 - 1000 Ha

Phase 3 - 8000 Ha

$ 1.0 Mn

$ 7.0 Mn

-

$ 0.14 Mn

$ 1.15 Mn

$9.2 Mn

$ 0.5 Mn

$ 4.1 Mn

$ 9.2 Mn

$ 0.1 Mn

$ 0.8 Mn

$ 7.5 Mn

$1.8 Mn

$13.0 Mn

$25.9 Mn

$1.0 Mn

$8.5 Mn

$20.0 Mn

$0.8 Mn

$4.5 Mn

$5.9 Mn

Clearing Cost @ $1000/Ha (includes clearing of land required in next phase) Cane Plantation Cost @ $1150/Ha Intercrop Plantation Cost @ $1150/Ha Equipment Cost (Tractors, Ploughs, Harrows, Rotavators, Ridgers Total Cost* Inter-crop Revenues Net Capital Required* *Not including cost of land

1.3.Community Development Initiative Sustainable community development is a concept that has to be deeply ingrained with the entire project plan and in its entirety should depict a pathway to greater societal development. This project will generate substantial local employment, and therefore needs to cater to the needs of the community that will form around it. Specifically, health and education services need to be available and accessible to all, and proper training facilities to prepare the man power are essential. The project envisages setting up a world class agricultural research institute aimed at i mproving and inculcating strong agricultural practices among the local farmers. It will also aim to develop a knowledge base that incorporates local experiences and cropping patterns. The institute will be home to agricultural scholars who will develop and integrate the implementation of efficient agricultural practices in the plantation that is to be developed. A hospital that offers quality healthcare and a school shall also be set up as part of the community development initiative to strengthen the community participation. A green buffer zone of around 2 km width around the project area will be proposed to mitigate any of the negative impacts by the project on the bio-diversity. The expected area of the recommended green buffer zone will be around 80 - 100 sq km. These initiatives will be designed and the associated costs would be estimated in the feasibility study.

2. Sugar Mill

1.1 Design Based on the sugarcane availability the sugar plant should be designed for a capacity of 2500 TCD1 expandable to 4000 TCD. It will have appropriate equipment for cane handling, juice extraction, boiling house, centrifugals and bagging house with the best technologies and equipment available in the world. The sugar mill shall produce refined 45 ICUMSA sugar and will consist of special melters, clarifiers, pans and centrifuges to get the desired purity. The following table shows the sugar mill operation under various scenarios of cane availability: Area of  Plantaion (Ha) 8000

Cane Yield (T Per Ha) 80

Cane Available (Tonnes) 640000

TCD 2500

Operation Days 270

9000

90

810000

3000

270

10000

100

1000000

3500

270

11000

100

1100000

4000

270

12000

100

1200000

4000

300

A 2500 TCD mill can achieve a crushing of 3000 TCD if operated and maintained as per norms. Thus a 2500 TCD mill is sufficient crush the yield from the captive plantation and the yield from out croppers (out croppers farm 1000 Ha). Once the out cropping exceeds 1000 Ha, the mill shall be expanded to 4000 TCD.

1.2

Sugar Process

Harvested sugar cane from the fields is piled, picked up, tied, and transported to the sugar factory by trucks. In the plant, a cane carrier carries the cane to the preparatory devices such as Kicker, Leveler, and Shredder, where the cane is cut into pieces and the prepared cane is fed into the milling tandem to extract the juice. The material left after extracting the juice is called bagasse and is used as fuel in the boilers for steam generation. This steam generated is used in the turbine to generate power. Part of the steam from the turbine is used for process heating requirements. The sugar-cane juice is heated to around 65-70oC in the juice heater. Then it is passed on to the  juice sulphitor, where simultaneous addition of milk of lime and SO2 gas is done. The first sulphited juice is again heated to around 102 oC and the mud is allowed to settle in a continuous clarifier. The clear juice is drawn out and mixed with the mud. The muddy juice, filterate, is 1

Tons of Crushing per Day

taken for re-processing, whereas the left out mud or filter cake is sent out and is utilized as manure for fields. The clear juice contains around 70% water. This water is evaporated in a series of vessels called Evaporator bodies. The concentrated juice coming out of the last body evaporator is known as syrup which has around 55-60 Brix 2. This syrup is bleached once again by passing SO 2 gas in the syrup sulphitor. The sulphited syrup is drawn to vacuum pans for further concentration and crystallization. The mixture of sugar crystals and mother liquor, massecuite 3, is dropped into crystallizers. The massecuite from crystallizers is taken to a centrifuge for separation of sugar crystals and mother liquor. The mother liquor is again taken to the pan for re-boiling of second and third (low-grade) massecuite. The Molasses separated from the last massecuite is known as final Molasses, which is weighed and stored. This molasses is used in the distillation process for generation of alcohol. Sugar obtained from first grade massecuite is dried through hot and cold air blowers over the hopper. Grading of sugar is done through a grader and then it is bagged, weighed and stored. The following figure outlines the sugar process:

2 3

Measure of concentration of Sucrose Concentrated syrup

1.3 Major Plant Equipment & Technological Options

Cane Handling Cane Unloading: Cane is unloaded on the conveyor from the truck using a crane. Cane Conveyor: Unloaded cane is passed on the conveyor to the kicker. Cane Kicker: This device helps the cane to flow smoothly on the conveyor by reducing the cane

size. Cane Levelers: It is used to cut the cane to a uniform level. This process makes the cane

preparation relatively easy. Cane Preparation Fiberizor: Cane is hammered to prepare it in the fibre form by disintegration of the cane so as to

facilitate efficient extraction of juice by the mills. There are 2 options available for Fiberizor – Inline Shredder and Conventional Fiberizor. The following is the comparison between two possible options that exist:

An Inline Shredder would be a better option, given its advantages over a Conventional Fiberizor.

Mill Tandem: This is the combination of sets of rollers provided to extract juice from the fibrous

cane. Mills use a 3 roller set or a 2 roller (Mill Max) set or a combination of both for this process. The following is a comparison between the two:

Based on the above advantages, it is proposed to have a Mill Max in the primary and secondary mills since its performance is the best in primary extraction, and 3 roller mills for the 3rd and 4th mill positions. Juice Heaters: These are used to raise the temperature of juice to make it more suitable for

addition of lime and sulphur-dioxide for better clarification. The following is a comparison between two possible options:

Based on the above advantages, plate type juice heaters would be ideal for the mill.

Clarification: Clarification is the process of removing impurities from the juice minimizing the loss of  sucrose from it. The following is a comparison between two options:

Based on the above advantages, SRI Clarifier is proposed in the process. Evaporation: It is the process of removing water from the juice and concentrating it. Clarified

 juice contains around 85% of the water. It is concentrated in a series of evaporators to convert it to syrup with 35% water. Quintuple effect with Flash recovery leads to significant reduction in the steam consumption and hence it is proposed in the process. Pan Boiling: In this process, thick juice goes to the vacuum pans where it is evaporated to super-

saturation. When the predetermined degree of super-saturation is reached, seeding takes place and the crystals are grown to the required size.

Based on the above advantages continuous pans would be ideal for the process. Driers: Wet sugar is dried in the drying units to make it suitable for the packing. Fluidized bed

driers are the best option because of higher heat transfer, lower dust and gentle treatment of  sugar.

Other Equipment Mill Drives: Drives are needed to run the mill tandem. Traditionally steam turbines are used to drive this heavy equipment but the steam used for this process can be used to produce power in the cogeneration plant. Modern mills utilize electricity powered drives to run the tandem. The electricity drives are of 2 types: AC drives and DC drives. The following is a comparison between all three options:

Based on the above advantages, AC drives are the best option.

1.4 Performance Parameters of Sugar Mill

Performance

Remarks

Min 90%

It is the measure of the effectiveness of  cane preparatory equipment like kicker, leveler and shredder

Min 96%(with 250% imbibitions)

It is the measure of effectiveness of mill tandem using a particular method (different methods are used for calculating this)

Max 50%

It is the indication of moisture in the bagasse. Cogeneration plants are designed for 50%. Any reduction in this significantly increases boiler efficiency

Around 80%

It is the measure of effectiveness of  evaporators

Min 90%

It is the measure of effectiveness of  complete boiling house (% extraction of  sugar available in mixed cane juice)

34.5%

It is the measure of steam consumed in the process as a percentage of total cane crushed

Pol % Filtercake

Max 1.5%

It is the measure of effectiveness of  vacuum filter (sucrose content lost with filter cake)

Sugar Temperature

Max 40 C

Temperature of the sugar at the packing stage

Max 0.03%

Moisture in the sugar at the packing stage

Parameter

Preparatory Index (PI)

Reduced Mill Extraction (RME)

Moisture % Bagasse

Effective Evaporation

Reduced Boiling House Recovery(RBHR)

Steam % cane

Sugar Moisture

1.5 Cost   The following is an estimated cost of a 2500 TCD mill expandable to 4000 TCD: S.No

Description

Price (Mn USD)

Price for machinery and equipment for 1

 juice extraction plant with in-line shredder  juice installation and 4 Nos 36"X78" size millmax tandem

12.4

Price for machinery and equipment for 2

Boiling House suitable for 2500 TCD Sugar plant

17.4

Price for machinery and equipment for 3

4

Centrifugal Station suitable for 2500 TCD Sugar plant

2.5

Civil Costs

3.7 Total

36.0

3. Cogeneration Power Plant 

2.1 Design The power plant design is based on the rankine cycle efficiency, cost considerations, metallurgy, operability, maintenance and specifications of similar bagasse based power plants. The following is a representation of the proposed cogeneration scheme:

Based on the information available, WE recommends a cogeneration plant of 18 MW capacity for the project. The following table shows the capacity utilization (operating days) and the output of the power plant in exportable units as the plantation and crushing capacity scale up: Area of  Plantation (Ha) 8000

Cane Yield(Per Ha) 80

Bagasse(TPD) 750

Operation Days 270

No. of  Units(Mn) Exportable 61.72

TCD 2500

9000

90

3000

900

280

74.87

10000

100

3500

1050

310

88.54

11000

100

4000

1200

330

100

12000

100

4000

1200

330

110

In Our’s opinion, the following are indicative specifications of the 18 MW power plant.

This plant is designed for 24 hours of operation and the sugar mill needs to be run accordingly to have uninterrupted supply of fuel. During off season, the stored bagasse will be used for power generation. The process steam requirement of the sugar plant is met from the steam extractions (High pressure and Low pressure) at two different stages of the turbines. Apart from this mill steam requirement, HP steam requirement and distillery steam requirement are also met from these extractions. After meeting the power requirements of the sugar plant, excess power generated by the power plant is exported to the grid. Transmission, and evacuation possibilities and costs will be assessed during the feasibility study. An HP heater is considered for the Co-gen plant from the point of view of a more efficient power cycle, which means lower fuel consumption per unit of power generated. Appropriate

water treatment plant along with RO and DM plants will have to be provided with suitable raw water storage tanks to meet boiler water specifications and make up water requirements. Systems like fuel handling, ash handling, switch yard, instrumentation air, control and instrumentation will be designed based on the layout. It is also proposed to have a DCS type data gathering and monitoring station, which will integrate the signals from boiler PLC, TG PLC and the signals from the BOP consisting of cooling tower fans, cooling water pumps, DM plant, water treatment plant and electrical system, so that the plant functioning can be monitored from the DCS panel.

2.2 Cost  

The following is an estimate of the cost of an 18 MW power plant: S.No

Description

Cost (Mn USD)

1

Boiler

9.0

2

Turbo Generator

6.1

3

Fuel & ash handling system Dense phase ash handling system VFD Main Cooling tower, CW Pumps & Valves EOT crane Switchyard Transformers LT panels - MCC& PCC HT Panels-MCC&PCC LT Package including lighting and earthing LT contract & Busduct Cables Civil works& Chimney

0.3 0.8 0.1 0.4 0.7 0.4 0.4 0.4 0.6 0.5 3.0

Distributed Control System, BOP-Instrumentation Piping & tanks Water treatment plant compressed air system Ventillation system Air conditioning system Fire fighting system Civil works Total

0.9 0.7 0.5 0.1 0.1 0.0 0.2 2.2 28.8

4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

1.1

4. Distillery

4.1 Design The following is the layout and process flow of a typical distillery:

Molasses storage and Handling: Molasses is stored in bulk storage and dry storage tanks of suitable capacity. The flow rate is measured with magnetic flow meters which are connected to a Programmable Logic Controller (PLC). Fermentation: It is a continuous fermentation process with suitable stainless steel tanks. These are provided with plate heat exchangers for cooling. Equipment like level monitor, automatic PH monitoring system, agitators and air blowers etc. are also provided to maintain the yeast population and to combat bacterial infection. A closed loop cooling tower system with an induced draft–cooling tower with circulation pumps is planned to ensure higher cooling efficiency and to minimize water wastages.

Distillation: Multi-pressure vacuum distillation is used because of many inherent advantages with the technology. Primary column is of grid tray construction and the other columns are of superior ‘bubble cap’ construction (bubble cap gives good tray efficiencies at different conditions). All these are connected and operated using PLC. Effluent Treatment: Effluent generated is around 400Cu.m/day with BOD of 65,000 mg/l and COD of 1, 20,000 mg/l. This High BOD/COD Spent-Wash that is the effluent of the distillery is treated aerobically in a closed digester and generated methane is captured in a controlled manner. The methane captured is combusted in a boiler for steam generation and further to generate power through a turbo-generator (used in the cogeneration boiler). It is proposed to put up a distillery of capacity 40,000 litres per day with 96% v/v Rectified Spirit as the main output. Molasses from the sugar mill is used as the raw material for this process. The following table shows the capacity utilization of the distillery as the plantation and crushing capacity scale up:

Area of  Plantaion(Ha) 8000

Cane Yield(Per Ha) 80

9000

TCD 2500

Molasses Per Day (Tonnes) 100

Alcohol (KLPD) 30

Operation Days 270

90

3000

120

36

270

10000

100

3500

140

40

284

11000

100

4000

160

40

324

12000

100

4000

160

40

340

4.2 Cost   The following is a cost estimate of a 40 klpd distillery: S.No

Description

1

Continuous Fermentation

2

Multi-pressure Vacuum Distillation

Cost (Mn USD) 1.1

1.3 3

Utilities items like Cooling Towers, and Instrument Air compressor / Tubing, insulation ,painting

4

Erection & Commissioning

5

Pumps electrical instrumentation of storage section

0.2 0.3

0.2 6 7

Water Treatment Plant Molasses Bulk storage

8

Storage section for alcohol along with receivers

9

MS Structure for Fermentation, Distillation, alcohol storage section

10

0.1 0.7 0.2 0.5

Biomethanation Plant 2.3

11

Civil 0.3 Total

7.2

5 Indicative Financials and Deal Structure

Project Cost 

The total project cost has been estimated including revenue and cost of the alternate / intercrop and without including the same. The Project entailing plantation on 8,000 Ha, 2500 TCD Sugar Mill, 18 MW Co-gen Power Plant and 40 KLPD Distillery in both the scenarios is as follows: Item

Without inter-crop

With inter crop (USD

(USD MN)

MN)

Land*

25.0

25.0

Plantation

27.5

11.5

Sugar Mill

36.0

36.0

Cogen Plant

28.8

28.8

Distillery

7.2

7.2

Total

124.5

109.0

* 8000 Ha @ USD 3125 / Ha

Although WE plans to enable interim cash flows by following the alternate / inter-crop strategy, the same has not been assumed in the base case as a conservative estimate. Any cash flow generated from the alternate / inter-crop would be ploughed back in to the project and would reduce the project cost.

The yearly phasing of the project cost for the base case is shown below USD MN

Jan-Dec-11

Jan-Dec-12

Jan-Dec-13

Total

Land Acquisition

25.0

-

-

25.0

Plantation Project Cost

1.5

9.0

17.0

27.5

Sugar Mill Project Cost

-

18.0

18.0

36.0

Power Plant Project Cost

-

14.4

14.4

28.8

Distillery Project Cost

-

3.6

3.6

7.2

26.5

45.0

53.0

124.5

Project Cost

5.1 Means of Finance The Project expected to be funded in the debt equity ratio of 75:25. With 75:25 debt equity ratio, the funding requirements of the Project is as follows: Debt

93.5

Equity

31.0

Total

124.5

The land would be valued at USD 3,125/Ha amounting to USD 25.0 MN for 8,000 Ha. This land will be contributed in form of equity for the Project in the name o company as 49 or 99 years lease agreement.

The annual phasing of funds that need to be invested in the project is shown below: USD MN

Jan -Dec-11

Jan -Dec-12

Land Acquisition

25.0

-

-

25.0

Plantation Cost

1.5

9.0

17.0

27.5

Sugar Mill Cost

-

18.0

18.0

36.0

Power Plant Cost

-

14.4

14.4

28.8

Distillery Project Cost

-

3.6

3.6

7.2

26.5

45.0

53.0

124.5

0%

95%

95%

-

43.2

50.3

93.5

Land

25.0

-

-

25.0

Cash

1.5

2.0

2.5

6.0

Equity Value

26.5

2.0

2.5

31.0

Project Cost Debt Debt Value

Jan-Dec-13

Total

5.2 Integrated Project Financials ; We have calculated Project cash flows starting from CY11 (Jan-Dec) to CY 28 (3 years of  plantation + 15 years of operations of Sugar mill, Co-gen Power Plant and Distillery). The combined financials for the Project are given below. In our base case analysis (i.e. without assuming intercrop plantation) the Project yields equity IRR of 28%

KEY PROJECT ASSUMPTIONS 1.

PLANTATION

Land Area

Ha

8,000

Land Value/Ha

USD

3,125

Land Acquisition

USD

25,000,000

Clearance Cost

USD

1,000

Ha

1,100

Land Clearance - Phase 1 Duration

Months

12

Land Clearance - Phase 2

Ha

6,900

Duration

Ha

12

Sugar Cane Plantation (Seed Import)

Ha

125

Sugar Cane Seed Yield

Ha

8

Cost of Plantation including Labor

USD

1,150

Escalation on Plantation Cost

USD

5%

Sugar Harvesting - Phase 1

Months

10

Sugar Cane Yield - Dec 14

T/Ha

70

Sugar Cane Yield - Dec 15

T/Ha

80

Sugar Cane Yield - Dec 16

T/Ha

90

Sugar Cane Price

USD

25

%

5%

Escalation on Sugar Cane Prices

2.

SUGAR MILL

TCD

T/Day

2,500

Project Cost / TCD

USD

14,400

Project Cost

USD

36,000,000

Operational Days - 1st Year

Days

224

Operational Days - 2nd Year

Days

256

Operational Days - 3rd Year onwards

Days

288

O&M Cost

%

8%

O&M Cost Escalation

%

5%

Cost of Sugar Cane Procurement

USD

25

Sugar Cane Cost Escalation

USD

5%

Sugar Wholesale Price

USD/Kg

0.50

Sugar Mill Electricity Consumption

kWhr/TC

28

MW

3

Steam Consumption by Mill

3.

CO-GEN POWER PLANT

Capacity

MW

18

Project Cost / MW

USD

1,600,000

Project Cost

USD

28,800,000

Operational Days - 1st Year

Days

224

Operational Days - 2nd Year

Days

256

Operational Days - 3rd Year onwards

Days

288

O&M Cost

%

8%

O&M Cost Escalation

%

5%

Tariff

USD

0.12

CER Value

USD

8.00

Auxiliary Consumption

%

12%

Transmission and Other Losses

%

5%

kg/Kwhr

1.90

Bagasse Fuel Consumption Norm

4. DISTILLERY Capacity

KLPD

40

Project Cost / MW

US$

180,000

Project Cost

US$

7,200,000

O&M Cost

%

8%

Ethanol Yield

lit/T

256

Ethanol Price

US$/lit

0.70

MW

1.5

Electricity Consumption - 1st Year

Mr Dawda’s Thinking

USD MN Land Acquisition

Jan -Dec-11 25.0

Jan -Dec-12 -

Jan-Dec-13 -

Total 25.0

Land Will Be Acquired By Shree HasmukhBhai For Company In the name of Company , In East Africa land owned on 49 or 99 Years lease, This land may cost 500 $ per acre. 27.5

8.5

9.0

17.0

6.5

1.5 ( 5M Revenue from Inter Crop)

7.5M From Inter Crop ( - 1M)

16 M

4M-5M Hasmukh Bhai willing ( Arrange) to put as equity at this stage

Sugar Mill Cost

-

18.0

18.0

36.0

Power Plant Cost

-

14.4

14.4

28.8

Distillery Project Cost

-

3.6

3.6

7.2

26.5

45.0

53.0

124.5

Plantation Cost

Inter Crop Cost

Equty Required

Project Cost