1. OVERVIEW PROJECT

2. BUSINESS CASE/MODEL

3. KEY BARRIERS TO OVERCOME

4. KEY POLICIES

5. KEY TAKE-AWAYS

Contents:

ADD VALUE TO AGRIBUSINESS SUPPLY CHAIN

Biogas and fertiliser production from agricultural waste:Central Agrícola, GT

Christian Colindres

Business Development Officer,

Central Agrícola

June 16th, 2021

1 ORIGIN AND

LOGISTICS OF

RAW MATERIAL

2 IMPORT AND TRADING

3 STORAGE OF RAW

MATERIAL.

PRODUCTS AND

SERVICES

(ANIMAL HEALTH

AND NUTRITION)

4

5

TRANSPORT/LOGISTICS 6 PRODUCTION

7END CUSTOMER

Business partners

Central Agrícola Group

Customers

OUR AGRIBUSINESS SUPPLY CHAIN

* GE Jenbacher Generator ™ CHP Unity (1,062 MW)

Power; 8,000

Heat; 9,000

7,400

7,600

7,800

8,000

8,200

8,400

8,600

8,800

9,000

9,200

Power Heat

Yield generation MWh/year*

1. OVERVIEW PROJECT:

a. TECHNOLOGY:

b. SIZE:

c. MAIN MOTIVATION:

Mid- to large-scale rural applications (mesophilic temperature)

1,062 MW ( +/- 60.000,00 metric tons of waste); estimated to supply +/- 8,000 MWh / year of in on-grid

+ Add value to our waste+ Final disposal of waste: low in emissions and

resilient+ Diversify the income of the farm from the

egg production unit+ Safeguards the variability of the prices of

livestock products

95’AGRIBUSINESS

SUPPLY CHAIN

10’ ADQUIRED

POULTRY FARM

PILOT PLANT &

FEASIBILITY STUDY

POWER CALL (TENER

POWER SUPPLY)

DESIGNS &

ENGINEERING

OPERATION

BACKGROUNG &PRE-

INVESTMENT

EXECUTION INVESTMENT

OPERATIONS

1995 Established with an Agribusiness supplies company

2010 Acquired an egg production farm (+/- 500,000 birds)

2014 Feasibility study and Tender for Power Supply (public tenders called “PEG 3-2013), awarded a supply of

1,000 MWh, through a long-term PPA (15 year), effective an established date with the distributor.

2015 Pilot plant and feasibility study

2016-2017 Designs, Engineering, Procurement and Construction stage with EPCM Management Agreement

2018 start-up or commissioning and operation/manager

14’

15’

16’

17’

18’

PROCUREMENT,

CONSTRUCTION, &

COMMISSIONING

OUR LEAD TIME OF THE DEVELOPMENT

1. OVERVIEW PROJECT:

* GE Jenbacher Generator ™ CHP Unity (1,062 MW)Our project: 1/4000 MW (0.025%) of total market

Installed capacity: 4.000 MW of total market

1. OVERVIEW PROJECT:

2. OUR BUSINESS MODEL

a. How is the project/program situated in the electricity market?

+ Grid-connected electricity with access available; in

combination with self-consumption of electricity/heat with PPA

(power purchase agreement) fixed price with annual

increment according to PPI -Annual Producer Price Index Industrial Commodities les fuels – WPU03T15M05-

1/4000 MW (0.025%)+ Type of contract PPA- energy generated, a minimum amount

is not required

+ Categorized with a smaller generator, called “Renewable

Distributed Generators (GDR)” plants with less than 5 MW of

installed capacity, with free access to the grid and subject to

variations in spot market prices.

Upstream:

Midstream:

Downstream:

Diagram 3. Agriculture Waste value chain

Management of waste sources,

traceability service and ensure a

correct final disposal

Biogas / digestate

and valorization of

biogas for power /

heat generation

add value to the digestate

for commercialization as

an organic and / or

organic-mineral fertilizer

b. What has been the business plan/case?

PRE-INVESTMENT:

INVESTMENT:

c. Who develops the project?

Developer Company thought

EPCm Agreement :

Engineering, Procurement and

Construction Management

Agreement

Our Business Development

Department (BDD/Central Agricola)

Pre-Investment phase

Equity: 60% by owners

(Central Agricola Group)

Grant: 40% by (CABEI-

Central American Bank

for Economic

Integrations)

Investment phase

Equity: 35% by owners

(Central Agricola Group)

Credit: 65% by Local

Bank through a global

credit line of CABEI

d. How has the finance been set up?

2. OUR BUSINESS MODEL

**Developer Company thought EPCm

Agreement : Engineering, Procurement and

Construction Management AgreementDesign , 2017

2. OUR BUSINESS MODEL

September 2017 **Developer Company thought EPCm Agreement : Engineering, Procurement

and Construction Management Agreement

0.00

500.00

1,000.00

1,500.00

2,000.00

2,500.00

3,000.00

3,500.00

4,000.00

4,500.00

5,000.00

*Pre-Investment **Investment

INVESTMENT STRUCTURE IN EACH PHASE ´000 US$, Est.

knowledge

CapEx

Taxes

Financial Expenses

Logistics

Delays/customs

commissioning

~5% (200 US$)

~95% (4.400 US$)

~70% (3.200 US$)

d. How has the finance been set up?

Total investment: 4,6 mm US$

*Our Business Development Department (BDD/Central Agricola)

**Developer Company thought EPCm Agreement: Engineering, Procurement and Construction Management Agreement

~10% (480 US$)

2. OUR BUSINESS MODEL

e. Who is operating and managing the project?

Operating

• Business unit: Plant Manager who oversees

the technical area and operation and Two

(2) plant operators

Managing & monitoring

• Business Unit: Unit Manager who oversees

the administrative, commercial and

regulatory areas

• Monitoring and follow-up contract for the

production of biogas with the developer

• Monitoring and maintenance of CHP unit

with GE Jenbacher for major services and

training for our plant operators to execute

the minor services.

2. OUR BUSINESS MODEL

3.KEY BARRIERS TO OVERCOME:

Key barriers in the DEVELOPMENT STAGE

• Know-how and technology

• Bioelectricity is not yet price-competitive with other energy sources “Subsidy or allowance in the price or diversify the products and services that the biogas plant must provide. For example; ??

• Income of electric power (bioelectricity) is not enough to cover the operation, charge-off and financial expenses costs of a biogas plant

Key barriers in the FINANCIAL STAGE

• Unknown technology or business model by local banks

• Risk for long periods of investment: around 2 years; included design and engineer's study

• Competitive interest rates and grace periods available, in a term greater than 18 months.

• Guarantees

Key barriers in the IMPLEMENTATION STAGE

• Customs have no knowledge about technology; which causes delays and additional storage costs and stays at the ports of entry to the region. 3% of investment related to delays

• Contracts, guarantees and insurance (technical and economic coverage)

What key barriers were encountered in the development, financing or implementation phases?

4. KEY POLICIES:

Key polices and

government support the

DEVELOPMENT STAGE

•DECRETO NÚMERO 52-2003; Incentives Law

for the Development of Renewable Energy

Projects/Guatemala Government :

•ARTÍCULO 5. Incentives:

•Import taxes

•Operations taxes and income taxes

•Planes de Expansión - Sistema Eléctrico

Guatemalteco.

•The first part of the plan deals with the

electricity generation system and is called

Plan de Expansión Indicativo del Sistema de

Generación 2008-2022 (PEISG)

•The second part is named Plan de Expansión

de Transportes (PET) and deals with the

upgrading of the aging transmission system.

Key polices and government support in the FINANCIAL

STAGE

•No availability to bio-electricity technology or

business model

Key polices and government support in the

IMPLEMENTATION STAGE

•DECRETO NÚMERO 52-2003; Incentives Law for the Development of Renewable Energy Projects/Guatemala Government :

•ARTÍCULO 5. Incentives:

•Import taxes

•Operations taxes and income taxes

What key policies and governmental support measures enabled the development, financing and implementation?

5. KEY TAKE-AWAYS:

Are there any key take-aways that other decision-makers should be aware of? Summary of key barriers and enablers ?

Business model included PPA (Power Purchase Agreement )

The waste value chain

Key-partner (Financial & developer)

Know-how and technology

HEADQUARTERSCalzada Atanasio Tzul 22-00, Z. 12 Empresarial El Cortijo II Ofibodega 120,

Guatemala City, GuatemalaPBX: +502 23270300 | FAX: +502 23270324

April 2018