Arrow Ecology Ltd. has won a Los Angeles Municipality tender to build a biogas pilot facility. If the pilot takes off, the company may build several facilities in the city for the conversion of municipal solid waste into energy. The company will deploy its ArrowBio technology for the project.
The pilot project is due to treat 150 tons of municipal solid waste per day. Arrow Ecology CEO Yair Zadik said that the objective was to recycle 80% of the waste into biogas that would generate at least one megawatt of electricity.
Alternatively, the biogas produced can be used to fuel vehicles. The biogas can be upgraded to natural gas quality, and most of the Los Angeles Municipal bus and truck fleet use natural gas. Arrow Energy and the Los Angeles Municipality will negotiation an agreement for this purpose.
Arrow Ecology declined to comment on the financial terms of the tender, but market sources said estimate the cost of building the pilot plant at $20-25 million. The sources estimate the potential revenue from the waste treatment, sale of recycled products and sale of biogas at $7 million a year.
Zadik said that 10-20 facilities would be needed to treat all of Los Angeles' municipal solid waste, since each facility can handle 50,000 tons of waste a year.
Arrow Ecology's US partner in the tender, CR&R Waste Services Inc. presented the ArrowBio technology in the tender. The two companies have set up a joint venture, California Renewable Technologies LLC (CART). Arrow Ecology will provide the technology for the facility, which CR&R will operate. The companies have not yet decided on how to share the costs or revenue of facility.
Zadik said, "We're currently in talks with international parties to finance the facility. We've already begun a $10 million financing round at a value of tens of millions of dollars." He added that the company was in talks with Israeli and foreign financial institutions.
Published by Globes [online], Israel business news - www.globes-online.com - on November 16, 2009
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