Opinion on  Ecolocap Solutions Inc (ECOS)
EcoloCap Solutions: A Carbon Credit Hedge Fund Model

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● An Equal Number of Projects in the Pipeline Expected to Close During 2H08
● $80 Million Potential Revenues by 2012 from Signed + Pipeline Projects
● $30 Million Potential Cumulative Cash Flow by 2012 Including Pipeline
● Seven Signed Projects Represent Estimated $39M in Revenues Through 2012
● A Carbon Credit (CER) Hedge Fund Business Model – Generated By Clean Energy Projects
● Lowest possible cost basis earned for carbon credits in emerging markets
● Credits are then sold in established markets for 40% – 70% profit margins

XiangTan Industrial Complex – China (4): This site is an industrial waste-to-energy project at an iron/steel plant which will capture heat that is normally lost into the atmosphere and use it to power turbines producing 28 MW of electricity. Operations are expected to begin with the first CER delivery by October 2009, and the project has a 20 year life cycle. The project is expected to generate about 153,000 tons of CO2 per year as the result of reduced emissions by replacing fossil fuels with a renewable source of energy (i.e. the heat that is captured). Revenues of $1.05 million are expected from this project during each full year of operation from 2010 – 2012, resulting in cumulative cash flow of $1.2 million by the end of 2012. EcoloCap has the right to buy CERs for this project at $15.20 (USD), resulting in gross margins of 31% at a conservative selling price estimate of $22 less 3% brokerage fees.

This industrial complex project will also include top gas pressure recovery turbine (TRT) technology to generate electricity of 15 MW, resulting in about 59,000 tons of CO2 emissions saved annually. The estimated project lifecycle is 20 years, with the first CER delivery anticipated in September 2009. For each full year of operation during 2010 – 2012, revenues are expected to be $0.4 million and cumulative cash flow of $0.84 million by the end of 2012. Another TRT project at this industrial complex is also expected to begin delivery of CERs by September 2009 with a twenty year lifecycle and about 150,000 tons of CO2 emissions saved annually. Revenus are expected to to total $1 million each year for 2010 – 2012 with expected cumulative cash flow of $2.3 million at the end of 2012. The gross margins of 31% are expected to be the same as outlined above for heat capture.

The third waste recovery project at this industrial complex will include coke dry quenching techno logy that recovers spent heat to power turbines with the capacity to generate 25 MW of electricity. This project has a 20 year lifecycle with the first CER delivery estimated to occur in one year (July 2009). About 149,000 tons of CO2 emissions are expected to be saved each year with full-year revenues expected of $1 million for 2010 – 2012 and cumulative cash flow of $2.3 million at the end of the three year period. The gross margins of 31% are expected to be the same as outlined above for heat capture.

Tien Rice Husk – Vietnam (1): This site involves a biomass project in the Tien Giang Province of Vietnam which will utilize the normally discarded rice husks (outer shells) to replace fossil fuels for electricity generation. Located in the Mekong Delta, which is the world’s second largest exporter, this project will generate electricity at cogeneration plants which will be distributed into regional electric grids. The project is expected to be online by January 2010, with an estimated life cycle of 19 years and about 42,000 tons of CO2 per year for 2010 – 2012. The project is expected to average $0.47 million per year in revenues for the first three years, resulting in cumulative cash flow of $0.87 million at the end of 2012. EcoloCap has the right to buy CERs for this project at $12 (USD), resulting in gross margins of 45% at a conservative selling price estimate of $22 less 3% brokerage fees.

Vietnam Landfill Multiplex (1): Gases released into the atmosphere which contributes to global warming from the degradation of organic waste will be collected in this project from a total of three landfills located at Hanoi, Haiphong/Thai Nguyen, and Danang/Hue. The first CERs are estimated for delivery in June 2009, with an estimated twenty year project lifecycle. An average of 570,000 tons of CO2 emissions are estimated to be saved from this project for 2010 – 2012, resulting in average revenues of $4.4 million during this three year period and cumulative cash flow of $3.2 million at the end of 2012. Reducing methane gas release from landfills offers a faster return on investment because reducing one unit of methane is equivalent to reducing 21 units of carbon dioxide, leveraging these types of clean energy projects into large numbers of tradable CERs.

Vietnam Hydro-Power Multiplex (1): This project consists of five hydro-power reservoirs (Khe Bo – 30.9%, Khanh Khe – 12.4%, Dak Rong – 17.5%, Tram Tau – 24.7%, and Suoi Chim – 14.4%) to harness the energy of rivers in Vietnam to replace coal and other fossil fuels to generate 97 MW of electricity. The first CERs from this project are expected in October 2009, and the project has an expected lifecycle of 17 years. About 211,000 tons of CO2 emissions should be saved from this project, resulting in an average of $2.2 million in net revenues for 2010 – 2012 and cumulative cash flow of $4.4 million by the end of 2012. An estimated 30,000 small-to-medium hydro-power projects are predicted for development over the next few decades in Asia, where EcoloCap has established its presence through both signed and pending deals.

Carbon prices (as measured by Certified Emissions Reductions or CERs ) have declined by 24% since peaking in early July. The fall in carbon prices mirrors that of energy commodities such as oil and other commodities such as precious/industrial metals and agricultural products.On the European Climate Exchange, the leading exchange for the secondary market trade of issued CERs, December 2008 CERs closed at 17.25 euros ($27 USD) on August 1, which is off by 24% or 5.50 euros from a peak of 22.94 euros in early July. The European Union Emission Trading Scheme (EU ETS) is the largest market for the trading of emission allowances, spanning 28 countries throughout Europe; and other developed countries such as the US, Japan, and Australia are developing similar ETS markets. Carbon commodity trading is dominated by EU Allowances (EUAs) with a 78% share, followed by CERs which are created through the United Nations climate change convention’s Clean Development Mechanism ( CDM ).