Equity/Debt Investment Needed in Biogas Plant Project with 15% ROI

Opportunity Snapshot

Investment Opportunity

We are seeking Equity finance or Debt finance to fund our plant project. The plant will generate 6,242,308kg of biogas annually. 15% (Debt), 15% ROI (Equity finance).

Our idea of the product is the production of biogas (methane) via bio-wastes to serve as an alternative to petrol dependency and support agriculture by converting the waste from the biogas process into fertilizer to support farming in Nigeria at affordable costs.

Because of the scarcity in the supply of gas in Nigeria, our immediate target market is industrial companies needing gas to substitute the expensive diesel used in their power generation.

Our revenue generation will come from the direct sale of gas. The fertilizer generated will be used to assist the local farmers, and will also help our pin fruit farm project for exponential output.

Our goal is to be able to augment the supply shortage plaguing the Nigerian market and to be a major player in the gas supply channel over time. We also wish to be a market leader when fossil fuel will be less favoured. When our Blakrab project is completed, we hope to be in the international gas supply market.

Our Pinfruit and Blakrab research is almost completed but will still require further research in the tooling side of the research. We cannot do much now until funding is achieved for our initial plant investment.

Depending on the size of the funding achieved, if full funding is obtained, the plant setup process takes 9 months to be completed and delivered. We have achieved an MOU for 40-50% funding from Business Finland but the company must first present its funds, we have also achieved an understanding for the 70% funding from the Bank of Industry (BOI) Nigeria but must present a Bank Guaranty (BG) before we could access the funding which we can not attain. We have completed the negotiation for 2000 acres of land to accommodate our pin fruit farm.

We are seeking funding to the tune of 11 million dollars. For loans, we are proposing 15% interest on investment annually until the loan is fully paid. For equity investment, we are proposing a 15% ROI with the possibility of a buyout at the end of the 5th year.

Competitive Advantage

Nigeria is presently not generating enough gas for domestic consumption.

Our direct competitors are the few generating plants producing natural gas located in the Niger Delta region of Nigeria where they truck the gas tubes to the Lagos part of the country which normally takes a whole days journey. My plant will be located in Lagos and close to the companies needing gas supplies. Our advantage lies in the fact that we will be the first commercial biogas plant to be established in Nigeria.

We are different from the others because we are in the renewable energy sector against fossil generation that will fade away in no distant time.

Our advantage will be sustained in the future because all our methane generation sources research (Pinfruit & Blakrab) will be actualized within 3 years of establishing our plant.

Rationale for the deal

The poor level of electricity generation in Nigeria owing to low gas supply, and the because of the ever-increasing prices and non-affordability of petroleum products (AGO & PKO) by the Nigerian consumers, the gas consumption culture has gradually begun though facing inadequate supply, provides us with the opportunity to contribute in our little way towards filling the vacuum in the supply of gas products.

When the plant is established, we shall be able to supply the market with 6242308kg of gas annually. We can also generate extra money from the sale of fertilizer generated, but we hope to support local farmers with our fertilizer.

In understanding how the biogas plant works, I did an induction with a biogas plant (Jeppo) in the Pietasari region in Finland. However, I have been conducting series of research regarding sources of exponential gas generation.

Use of financing

Eleven million dollars (11m) is required in establishing the proposed plant and includes the cost of importation of the equipment, clearing, and construction needs. The equipment cost for the biogas process is 7million dollars. It is projected that the cost of importation expenses (clearing and Insurance) will be around 1.22 million dollars, establishment and miscellaneous to cost around 3.1 million dollars bringing the total investment needed to 11 million dollars.

Only one round is desired. Paying for the equipment supply (7 million dollars) and the expenses towards clearing and establishment.

Opportunity for the investor

For debt investment, though the total amount needed is 11 million dollars, but a minimum of 7 million is needed to cover the supplier. The payback period is 5 years and the interest rate of 15%.

For equity investment, the ROI is 15% on investment, or 10-40% equity depending on the amount raised.

We are looking for a silent investor.

Though single round of investment schedule is desirable because what is required is to pay the project supplier, and also be able to cover the clearing and importation expenses, and cost of the establishment once the equipment arrives in Nigeria.

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