SUKHA Alternative Energy Suman Shakya MD, One Planet Solution Consultant / Service Provider, SAE Pvt. Ltd.

Just thinking does not make a positive difference.

Doing it does !

SUKHA Alternative Energy Pvt. Ltd.

• New company

• Combined experience of over 60 years

• Produce Electricity from Poultry waste – 1.25 mw

• Produce Organic Fertilizer – 1000 mt annually

• Three promoters combined turnover in excess of NPR 25 Crores / USD 2.9 mil

• Subis, Khanal and Annapurna Poultry farms located around 2 km at East Chitwan

Promoters’ Background

• Father of poultry in Nepal

• Established companies

• Well explored eco system

• Expanding bird capacity

• Setting up environmental control system

• Farms has bio gas plants

Promoters’ Experience

• Experimented a lot

• Tried to implement many solutions

• Even produced electricity

• Subject to various researches

• Multiple promises

• No result

Problems

• Waste management

• 20 tons of average poultry waste per day.

• High demand during season, low other times

• Problems in functioning consistency

• Community issues

• Cost to dispose

• Health risk due to air pollution and flies

• High cost of fuel during load shedding

Solution

Solution

• Rather than wait, Jump

• Size does matter

• Combined strength - 200,000 birds

• Spreading risks – 3 promoters

• Faster access to technology

• Seen it work in other countries

• Ready to make initial equity investment

Farm

Farm

Bird Cage

Transporting waste

Proposed system

The Math

Business Model

• Revenue - Electricity and Organic Compost Fertilizer

• The 3 promoters themselves - buyers of electricity

• Current demand = production

• Price – half of what is currently incurred using diesel

• Excess will be connected to the national grid whose substation is only 1.5 km away

• Organic compost fertilizer in high demand

• Selling price conservative, buyers available

• Excess gas – to be sold

Business Model

• Company – led by Atul Khanal, MBA – BE

• Team composition – mix of engineering and operational skill set

• Replicable – Immense possibility >15,000 farms

• Tested solution in other countries

• All three farms gearing for growth

• Double capacity in three years

• Expansion inevitable

Impact –Environmental / Social

• Elimination of waste – extremely environment and health hazard

• Reduction of methane – one cause of global warming

• Reduction in diesel pollution – 80 liter a day

• Disposal of the waste – health hazard, improved sanitation. Smell is a big nuisance

• Increase in awareness of bio gas plants

• Community benefit from excess gas/electricity

Impact – Finance

• Creates economic value while solving multiple environmental problems

• Integrated solution to multiple problems

• Supplier is supported by GIZ, IDCOL, IFC, SNB and KFW.

• Replication is easy

Financial Highlights

NPR USD

Investment 61,530,000.00 723,882.35

Capital Structure

Equity 30% 18,459,000.00 217,164.71

Loan 70% 43,071,000.00 506,717.65

Cash Flow

-

2,000,000.00

4,000,000.00

6,000,000.00

8,000,000.00

10,000,000.00

12,000,000.00

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7

Projected Cash Flow

Financial Highlights

Interest Rate 11% Payback period 9yrs BEP (year 1 at 100% capacity) 84% NPV (net cash inflow basis) @ 9% NPR 5,137,458 IRR ( Net cash inflow basis) 9.98% Liquidity 2.57:1 in year 7

Loan repayment 7 years

Required Investment

• 70% of the project - USD 506,717.65

• As debt – long term loan to be taken up by the company

• At preferential interest rates

• Without exchange risks

• Support to understand technology transfer and project feasibility better

• 30% of the project - USD 217,164.71

• Injected as equity by three partners in equal amount

Points to Ponder

• Issues with locals

• Bird Flu

• Dollar Rate fluctuation

• Transmission lines

We are ready. Are you? SUKHA Alternative Energy Pvt. Ltd.