Cayman Project

 Private Placement

This investment is a ‘private placement’. There is no public market for the shares in the LLC or any other of its securities, and no such market will develop as a result of this offering. The shares have not been registered under the Securities Act of 1933 and are being offered and sold in reliance of exemptions from the registering requirements of this law. These securities have not been approved nor disapproved by the Securities and Exchange Commission or any state regulatory authority nor has the Commission or any state regulatory authority passed upon or endorsed the merits of the offering or the accuracy or adequacy of this private placement memorandum. Any representation to the contrary is unlawful.

Summary

The Electricity Regulatory Authority of the Cayman Islands (the “ERA”) has effective February 1, 2011, approved revisions to the Consumer Owned Renewable Energy (“CORE”) program, replacing the avoided cost of fuel reimbursement formula with a Feed-in Tariffs structure (FIT). The new structure, developed in conjunction with the ERA and recommended by the Caribbean Utilities Company, Ltd. (“CUC”) has been approved by Cabinet. FITS provides for significant incentives to consumers who generate energy from renewable sources and also reflects current practice throughout North America and Europe for incentives for consumer generating renewable energy.

The CORE program allows customers in Grand Cayman to connect renewable energy systems, such as small scale solar systems to CUC’s distribution system and to reduce their monthly energy bills by generating their own electricity while remaining connected to the CUC grid.

Solar Projects

Energy Engineering Corporation (EEC) and Energy Portlands (EP) are proposing within this CORE program to install kilowatt scale (kW) of solar panels by renting rooftops of CUC’s subscribers.  EEC-EP is offering KY$0.04/kWh (US$0.05/kWh) for renting rooftops of residential and commercial buildings under 20-year lease.

EEC in collaboration with local electricians can provide maintenance and administrative services to maintain energy production level from the solar generating equipment. For the implementation of the equipment, Caribbean companies working in solar power industry have been retained. These companies, in association with EEC will be responsible for the installation of solar facilities.  These partners have already implemented 25 MW of rooftop projects in the Caribbean and other parts of the world (Barbados, Martinique, Guadeloupe & Reunion), greatly reducing installation risks and allow the project to move ahead rapidly once the financing is in place.

Project limits

CUC has limited to 2000 kW of solar projects and about 1200kW have already been allocated. The maximum permitted size of individual renewable energy systems is a maximum of 20 kilowatts (“kW”) for residential systems and 100 kilowatts (“kW”) for commercial systems.

Feed-In-Tariff

The starting & minimum tariff offer by CUC is CI$0.37/kWh (US$0.43/kWh). This is a 20-year PPA.

Current development

EEC-EP is just starting to sign 20-year lease contracts with commercial & residential owners in Cayman. It is expected signing from 200kW to 700kW of contracts in coming months.

The cost for implementing solar panels

EEC-EP is in touch with local organizations and international suppliers to establish implementation costs near $3.30 per watt including EEC-EP lease contracts and 20-year PPA with local utility CUC.

EBITDA

Here is a table presenting the EBITDA for year 1, 5, 10 &20:

 

Escalation Rate:

3%

     

Solar Power kW:

          400 kW    

Energy kWh:

600,000

kWh    

Investment:

US$1,320,000.

US$    

 

 Year 1

 Year 5

 Year 10

 Year 20

Tariff US$/kWh:

 $            0.434  $            0.488  $            0.566  $            0.761

 Income US$:

 $         260,400  $         293,082  $         339,763  $         456,613

 Rent:

(30,000)

(32,473)

(35,853)

(43,704)

 Maintenance:

(12,000)

(12,989)

(14,341)

(17,482)

 Management:

(10,800)

(11,690)

(12,907)

(15,734)

 Insurance:

(20,000)

(21,649)

(23,902)

(29,136)

 EBITDA:

 $         187,600  $         214,281  $         252,760  $         350,557

 American tax advantages

The tax rate on Grand Cayman is 2%. Therefore the net profit from the gross income is 98% of the gross income. American investors will be sheltered by the Investment Tax Credit which is 30% for the American made equipment to be installed to produce the “Green Energy”.  In addition there is an accelerated depreciation schedule set by the Internal Revenue Service for “Green Energy Installations” for American built equipment.  Your CPA will be able to provide expert advice for your “Green Energy Investments”.

Conclusion

 This investment offers a ‘low risk high return’ opportunity. It is supported by a long term PPA with CUC which has good credit ratings at “Toronto Stock Exchange”. The technology is proven with long term performance guarantee which provides downside risk protection to the investors. The project completion period is comparably short. Finally, the project can be scaled upwards with additional capacity and similar feed-in-tariff in Barbados. CUC obligation to provide attractive long term PPA is confirmed by government decree.

Energy Engineering Corp. / Energy Portlands LLC
Contact click here

One Response to Cayman Project

  1. Richard Hinds says:

    what would my return ROI be !!

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