Dr Truong, the President and CEO of EcoloCap Solutions (OTCBB: ECOS), has returned from a very successful three-week tour of China and Vietnam. The Company is proud to announce [web link to SEC 8-K filing] that it has signed additional projects, preliminary agreements, and numerous other projects that will effectively double its reserve of carbon credits (CERs) with long-term (17-year) renewable energy project contracts. In addition, Dr Truong and his teams on the ground in both China and Vietnam have preliminary agreements for a number of other clean energy projects that would again grow the company’s CER reserves by a large margin.
- Three New Hydro-Power Projects in Vietnam
- One Biomass Valorization Project in Vietnam
- Four Large Industrial Complexes (two steel mills, one cement production complex, and one coal mine) in China
- New Projects Double the Company’s Seven Signed Clean Energy Projects
- Total projects signed by ECOS will represent an annual production of 807,660 CERs
- CERs are currently trading on the world market at over 20 euros ($29.50 USD)
- These are all long-term contracts with a minimum term of 17 years
Dr. Truong stated, “We have very knowledgeable and well-connected teams in both China and Vietnam presently evaluating a number of other projects where we have Letters Of Intent or Agreements close to conclusion. When signed, those will effectively, again, double the CER reserve of EcoloCap with long-term contracts. Our financial evaluation is comparable to oil and gas companies that value their total proven reserve for the number of years they will extract oil from the ground. In our case, our 17-year contracts will produce UN-Certified CERs for that period. When we apply accepted financial rules to our reserve of CERs for a period of only 6 years, EcoloCap shows a net present value of over $43 million, and we aim to double our total reserve every six to nine months over the next two to three years with an objective of 5 million CERs in our portfolio.”
EcoloCap operates as a CDM hedge fund business in the form of off-take contracts with owners of landfills, hydro-power projects, and industrial complexes in emerging markets such as China and Vietnam. As part of this green business model, CERs are produced at the lowest possible cost possible and then sold through established international markets at a profit margin of 40% to 70%, after taking into account investment costs and other fees. The Company also supplies its administrative expertise in the Kyoto certification process, in addition to hands-on engineering and project management support. According to World Bank statistics , in 2006 over $31 billion of carbon credits were traded and last year the total more than doubled to over $64 billion, representing the reduction of 3 billion tons of greenhouse gas emissions from the air.
The head of environmental markets at Barclays Capital has predicted that carbon credits could become not just the world’s biggest commodity market; but the biggest market overall , with market experts predicting a staggering total of $1 trillion possible within a decade. 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 CDM projects such as those described earlier – which are both tracked through the recently launched iPath Global Carbon ETN (GRN).
My Related Articles with Links :
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$0.65 (08/20/08)
