The plant was upgraded from 12MW to 18MW in 2008, with the installation of a new generator and HTC steam turbine engine. The plant site has its own substation and transmits electricity directly into the national power grid of India.

The completion of the acquisition is subject to bank approvals of the assumption by Clenergen of outstanding bank loans relating to the plant and the release of such loans by the plant’s current owner. The purchase will be funded through local bank financing and a cash transfer at closing.

The plant sells the electricity it produces through short term power purchase agreements with direct end users at an average price of $0.13-16KWh. Clenergen believes that, at such an average price, the plant will generate an estimated $15m in revenues per year, assuming a plant load factor of 80% is maintained.

It is estimated that cash of surplus $3m per annum will be generated at the projected load factor. The company retains the option to encompass the short term power supply contracts under the 71MWh power purchase agreement entered into with Power Trading Corporation of India.

The plant converts wood chips and other forms of biomass into steam through a combustion steam process, which is then used to power the plant’s steam turbine engines. Biomass feedstock supply contracts are currently in place with local vendors, the company said.