1408 uganda sugar proposal q 1-7-22

7/28/2019 1408 Uganda Sugar Proposal Q 1-7-22

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Proposal for Sugar Project by House of Dawda


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1 Table of Content

Executive Summary ......................................................................................................................................3

1. Plantation Development.......................................................................................................................4

1.1. Overview .......................................................................................................................................5

1.2. Development Strategy ..................................................................................................................6

1.3. Cost and Revenues........................................................................................................................8

1.4. Community Development Initiative............................................................................................10

2. Sugar Mill ............................................................................................................................................11

1.1 Design..........................................................................................................................................12

1.2 Sugar Process..............................................................................................................................12

1.3 Major Plant Equipment & Technological Options ......................................................................14

1.4 Performance Parameters of Sugar Mill.......................................................................................18

1.5 Cost .............................................................................................................................................19

3. Cogeneration Power Plant ..................................................................................................................20

2.1 Design..........................................................................................................................................21

2.2 Cost .............................................................................................................................................24

4. Distillery ..............................................................................................................................................25

4.1 Design..........................................................................................................................................26

4.2 Cost .............................................................................................................................................28

5. Indicative Financials and Deal Structure.............................................................................................29

5.1 Project Cost.................................................................................................................................30

5.2 Means of Finance........................................................................................................................31

5.3 Integrated Project Financials ......................................................................................................32


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Executive Summary

The House of Dawda plans to develop up to 12,000 hectares of fertile land in Uganda, which is

suitable for sugar cane cultivation as well as other crops. The client wishes to establish a sugar

cane plantation, sugar mill, power plant and distillery in order to optimize land usage.

Currently, the land is under thick bush and the planned project includes clearing the entire land

area and raising the sugarcane and an inter-crop to achieve stable yields at the end of three

years. Construction of the mill, power plant and distillery will start in parallel and the

commissioning is to coincide with the plantation achieving a stable output.

Proposes to carry out a detailed feasibility study to assess the various aspects of the entire

project and prepare detailed implementation plans for the plantation, mill, distillery and power

plant.

Based on an initial understanding, the entire plantation development should be done in 3

phases - 100 to 125 Ha (Phase 1), 1000 Ha (Phase 2) and 8000 Ha (Phase 3) to gradually

increase the cultivated area and develop seeding capacities. Corresponding to the cane

availability a 2500 TCD, 45 ICUMSA sugar mill which shall be expandable to 4000 TCD, an 18

MW power plant and a 40 klpd distillery should be installed. The production of sugar and other

resulting by-products align with the Clients booming FMCG business and the consequent in-

house requirement of 55,000 T per annum of 45 ICUMSA sugar. Uganda is power deficit and the

renewable power from the proposed power plant presents an opportunity to improve thepower situation. The project is planned to have positive social, cultural and economic impact on

the local communities and farmers.

The entire project is expected to cost USD 125 MN in the base case and is expected to be

financed at a debt equity ratio of 3:1. As land would be contributed in the form of equity, the

equity investment required in cash would be USD 6.0 MN. The expected equity IRR from the

project is in excess of 28%.

The remainder of this document describes our initial understanding of the Project and the

scope of work to prepare a detailed implementation plan.


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1.Plantation Development


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Overview

The sugar cane plantation is one of the key parts of the entire project and one on which the

success of the entire project hinges. Sugar cane is a complex crop exhibiting intricate patterns

in terms of yield, quality, maturity time, disease resistance and water requirement. Being a sub-

tropical crop that undergoes vegetative propagation, the plantation performance will be

dependent on temperatures, rainfall, weather cyclicality and soil type. Sugar cane performs

best when there is no water logging and the local weather has a distinct winter season at the

time of harvesting.

Each hectare of plantation requires 6-7 tonnes of seed. The sugar cane seed is a small piece of

stem taken from an 8-10 month old sugar cane plant. The entire 8000 hectare land area would

hence require around 48,000 tonnes of seed. At full scale, the plantation will have a work force

of up to 20,000 workers and large inventory of farm equipment. Clearing the land initially and

preparing it for farming would require significant effort and would take around a year to clear

depending on the resources mobilized. The plantation will have to be structured and planned in

such a way that the right ratoon mix is available when the mill, power plant and distillery

become operational. The entire plantation will take around three years to develop and mature.

The plantation strategy that is developed should include the following aspects:

The capital requirement for the plantation activity should be minimized.

If possible, there should be a source of cash flows in the interim period while the land is

cleared and the plantation is being developed.

The timing of the first harvest from the fully developed plantation should coincide with

commercial operations date of the mill.

The varieties chosen must be optimized from the maturity, cane yield, sugar yield and

disease resistance perspectives.

The best agricultural practices should be incorporated, and agricultural research capability

should be built.

Local resources should be trained and developed to maximize employment opportunities

and accelerate local economic development in Uganda.


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1.1.Development Strategy

WE proposes to develop the entire plantation in phases and build up capacities in such a way

that each of the critical issues is addressed.

The phased approach would minimize the upfront requirement of capital and also enable an

interim cash flow by utilizing the cleared land for alternate crops e.g. potatoes, sunflower etc,

and for inter-cropping.

Inter-cropping basically involves simultaneous plantation of another crop along with sugar

cane. The inter-crop is usually smaller in height and is either capable of fixing nitrogen in the

soil or at least is less nitrogen intensive, thus complementing a nitrogen intensive crop like

sugar cane. The distance between two rows of sugar cane is ideally around 4 feet and the

intermediate space can be used for the development of the inter-crop. There are various inter-

cropping options for sugar cane which include wheat, soyabean, lentils, potato, maize and

other vegetable crops. There may also be more exotic high value crops (such as medicinal

herbs), which would be identified and assessed in the feasibility stage.

The complete plantation would require about 48000 tonnes of seed (6 tonnes / hectare). It

would be logistically difficult to import / source this quantum of seeds from external sources.

Each hectare of 8-10 month old sugar cane can provide seeds for another 10 hectares of land.

In the phased implementation approach, with an expansion factor of 8-10x, the entire

plantation can be initiated by sourcing a manageable 750 tonnes of seed.

The mill, power plant and distillery would need about 2 years to implement. WE anticipates

commencement of construction of these at the end of the first year. In the three-phase

development, it would take approximately three years to produce the first full yield of

sugarcane on the entire plantation. Thus the phased approach would result in the plantation

generating the first full crop coincident with the commissioning of the other parts of the

project.

Based on above considerations, WE proposes to implement the plantation in 3 phases, each ofapproximately 1 year duration.


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Phase 1: In phase 1 around 100-125 hectares of land will be cleared and the sugar cane will be

planted. The seed for this phase (around 600 750 tonnes) would be either procured locally or

imported based on optimum variety suitable for the site, the quarantine/import restrictions,

and cost considerations. The clearing and planting in the 100-125 hectares would be done as

soon as the Client gives a go ahead for the project and makes the land available. The right inter-crop based on the local climatic conditions, soil type, maturity period and market rates would

also be planted along with the sugar cane to establish cash flows and recoup some of the

investment.

Once financial closure is achieved (in about 4-5 months), another 900 hectares of land required

for plantation in phase 2, would be cleared. Alternate crops of shorter maturity cycle would be

planted as and when the land becomes available for agriculture.

This phase shall also include standardization of agronomic practices, man power training and

computerization of the cane management system.

Phase 2: Phase 2 would involve sugarcane plantation on 1000 hectares (including the land

planted in phase 1). The sugarcane harvested from phase 1 would be used for seeding in phase

2. The inter-cropping strategy explained in phase 1 would be replicated in phase 2.

In this phase the remaining 7000 hectares of land would be cleared. Alternate cropping strategy

for this additional land would be followed.

Phase 3: In phase 3, sugar cane would be planted on the 8000 hectares using the seed from

phase 2. Inter-cropping would be carried out. At the end of this phase the entire plantation

would be developed and the first full crop would be ready for harvesting.


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The following is the cultivation plan for the plantation:

1.2.Cost and Revenues

The plantation economics in the development phase revolve around the choice and realization

from the inter-crop. Apart from the agro-climatic feasibility of each option, the commercial

viability of the crop and its demand in the local scenario will affect the cash flows from the land.

A rough estimate of the revenues from inter-cropping is USD 2500/Ha/year. This will be

verified and pinpointed more accurately in the feasibility study.

Land clearing and development will cost approximately USD 1000/Ha. Land development shall

include leveling, fencing and construction of preliminary irrigation infrastructure. A suitable

gradient is required to facilitate land drainage and irrigation.

The cost of planting cane is expected to be around USD 1150/Ha. Cane planting cost includes

cost of seeds, fertilizer, manpower, electricity and other expenses in raising the crop.

The cost of planting the inter-crop is expected to be also around USD 1150/Ha and includes the

cost of seeds, fertilizer, manpower, electricity and other expenses.

100-125 Ha

1000 Ha

8000 Ha1

Yr

1

Yr

1

Yr

8-10

x

8-10

x


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An indicative financial estimate of the plantation is shown below. These figures are preliminary

and more accurate figures will be developed post assessment of the site and local conditions:

Phase 1 - 125 Ha Phase 2 - 1000 Ha Phase 3 - 8000 Ha

Clearing Cost @

$1000/Ha (includes

clearing of land

required in next

phase)

$ 1.0 Mn $ 7.0 Mn -

Cane Plantation

Cost @ $1150/Ha $ 0.14 Mn $ 1.15 Mn $9.2 Mn

Intercrop PlantationCost @ $1150/Ha $ 0.5 Mn $ 4.1 Mn $ 9.2 Mn

Equipment Cost

(Tractors, Ploughs,

Harrows,

Rotavators, Ridgers

$ 0.1 Mn $ 0.8 Mn $ 7.5 Mn

Total Cost*$1.8 Mn $13.0 Mn $25.9 Mn

Inter-cropRevenues $1.0 Mn $8.5 Mn $20.0 Mn

Net Capital

Required* $0.8 Mn $4.5 Mn $5.9 Mn

*Not including cost of land


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1.3.Community Development Initiative

Sustainable community development is a concept that has to be deeply ingrained with the

entire project plan and in its entirety should depict a pathway to greater societal development.This project will generate substantial local employment, and therefore needs to cater to the

needs of the community that will form around it. Specifically, health and education services

need to be available and accessible to all, and proper training facilities to prepare the man

power are essential.

The project envisages setting up a world class agricultural research institute aimed at improving

and inculcating strong agricultural practices among the local farmers. It will also aim to develop

a knowledge base that incorporates local experiences and cropping patterns. The institute will

be home to agricultural scholars who will develop and integrate the implementation of efficient

agricultural practices in the plantation that is to be developed.

A hospital that offers quality healthcare and a school shall also be set up as part of the

community development initiative to strengthen the community participation.

A green buffer zone of around 2 km width around the project area will be proposed to mitigate

any of the negative impacts by the project on the bio-diversity. The expected area of the

recommended green buffer zone will be around 80 - 100 sq km.

These initiatives will be designed and the associated costs would be estimated in the feasibility

study.


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2.Sugar Mill


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1.1 Design

Based on the sugarcane availability the sugar plant should be designed for a capacity of 2500TCD

1expandable to 4000 TCD. It will have appropriate equipment for cane handling, juice

extraction, boiling house, centrifugals and bagging house with the best technologies and

equipment available in the world.

The sugar mill shall produce refined 45 ICUMSA sugar and will consist of special melters,

clarifiers, pans and centrifuges to get the desired purity.

The following table shows the sugar mill operation under various scenarios of cane availability:

Area of

Plantaion

(Ha)

Cane Yield

(T Per Ha)

Cane

Available

(Tonnes) TCD

Operation

Days

8000 80 640000 2500 270

9000 90 810000 3000 270

10000 100 1000000 3500 270

11000 100 1100000 4000 270

12000 100 1200000 4000 300

A 2500 TCD mill can achieve a crushing of 3000 TCD if operated and maintained as per norms.

Thus a 2500 TCD mill is sufficient crush the yield from the captive plantation and the yield from

out croppers (out croppers farm 1000 Ha). Once the out cropping exceeds 1000 Ha, the millshall be expanded to 4000 TCD.

1.2 Sugar Process

Harvested sugar cane from the fields is piled, picked up, tied, and transported to the sugar

factory by trucks. In the plant, a cane carrier carries the cane to the preparatory devices such as

Kicker, Leveler, and Shredder, where the cane is cut into pieces and the prepared cane is fed

into the milling tandem to extract the juice. The material left after extracting the juice is called

bagasse and is used as fuel in the boilers for steam generation. This steam generated is used in

the turbine to generate power. Part of the steam from the turbine is used for process heating

requirements.

The sugar-cane juice is heated to around 65-70oC in the juice heater. Then it is passed on to the

juice sulphitor, where simultaneous addition of milk of lime and SO2 gas is done. The first

sulphited juice is again heated to around 102oC and the mud is allowed to settle in a continuous

clarifier. The clear juice is drawn out and mixed with the mud. The muddy juice, filterate, is

1Tons of Crushing per Day


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taken for re-processing, whereas the left out mud or filter cake is sent out and is utilized as

manure for fields. The clear juice contains around 70% water. This water is evaporated in a

series of vessels called Evaporator bodies. The concentrated juice coming out of the last body

evaporator is known as syrup which has around 55-60 Brix2. This syrup is bleached once again

by passing SO2 gas in the syrup sulphitor.

The sulphited syrup is drawn to vacuum pans for further concentration and crystallization. The

mixture of sugar crystals and mother liquor, massecuite3, is dropped into crystallizers. The

massecuite from crystallizers is taken to a centrifuge for separation of sugar crystals and

mother liquor. The mother liquor is again taken to the pan for re-boiling of second and third

(low-grade) massecuite. The Molasses separated from the last massecuite is known as final

Molasses, which is weighed and stored. This molasses is used in the distillation process for

generation of alcohol. Sugar obtained from first grade massecuite is dried through hot and cold

air blowers over the hopper. Grading of sugar is done through a grader and then it is bagged,

weighed and stored.

The following figure outlines the sugar process:

2Measure of concentration of Sucrose

3Concentrated syrup


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1.3 Major Plant Equipment & Technological Options

Cane Handling

Cane Unloading: Cane is unloaded on the conveyor from the truck using a crane.

Cane Conveyor: Unloaded cane is passed on the conveyor to the kicker.

Cane Kicker: This device helps the cane to flow smoothly on the conveyor by reducing the cane

size.

Cane Levelers: It is used to cut the cane to a uniform level. This process makes the cane

preparation relatively easy.

Cane Preparation

Fiberizor: Cane is hammered to prepare it in the fibre form by disintegration of the cane so as tofacilitate efficient extraction of juice by the mills. There are 2 options available for Fiberizor

Inline Shredder and Conventional Fiberizor. The following is the comparison between two

possible options that exist:

An Inline Shredder would be a better option, given its advantages over a Conventional

Fiberizor.


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Mill Tandem: This is the combination of sets of rollers provided to extract juice from the fibrous

cane. Mills use a 3 roller set or a 2 roller (Mill Max) set or a combination of both for this

process. The following is a comparison between the two:

Based on the above advantages, it is proposed to have a Mill Max in the primary and secondary

mills since its performance is the best in primary extraction, and 3 roller mills for the 3rd

and 4th

mill positions.

Juice Heaters: These are used to raise the temperature of juice to make it more suitable for

addition of lime and sulphur-dioxide for better clarification. The following is a comparison

between two possible options:

Based on the above advantages, plate type juice heaters would be ideal for the mill.


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Clarification: Clarification is the process of removing impurities from the juice minimizing the loss of

sucrose from it. The following is a comparison between two options:

Based on the above advantages, SRI Clarifier is proposed in the process.

Evaporation: It is the process of removing water from the juice and concentrating it. Clarifiedjuice contains around 85% of the water. It is concentrated in a series of evaporators to convert

it to syrup with 35% water. Quintuple effect with Flash recovery leads to significant reduction in

the steam consumption and hence it is proposed in the process.

Pan Boiling: In this process, thick juice goes to the vacuum pans where it is evaporated to super-

saturation. When the predetermined degree of super-saturation is reached, seeding takes place

and the crystals are grown to the required size.

Based on the above advantages continuous pans would be ideal for the process.

Driers: Wet sugar is dried in the drying units to make it suitable for the packing. Fluidized bed

driers are the best option because of higher heat transfer, lower dust and gentle treatment of

sugar.


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Other Equipment

Mill Drives: Drives are needed to run the mill tandem. Traditionally steam turbines are used to drive this

heavy equipment but the steam used for this process can be used to produce power in the cogeneration

plant. Modern mills utilize electricity powered drives to run the tandem. The electricity drives are of 2

types: AC drives and DC drives. The following is a comparison between all three options:

Based on the above advantages, AC drives are the best option.


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1.4 Performance Parameters of Sugar Mill

Parameter Performance Remarks

Preparatory Index (PI) Min 90%

It is the measure of the effectiveness of

cane preparatory equipment like kicker,

leveler and shredder

Reduced Mill Extraction (RME)Min 96%(with

250% imbibitions)

It is the measure of effectiveness of mill

tandem using a particular method

(different methods are used for

calculating this)

Moisture % Bagasse Max 50%

It is the indication of moisture in the

bagasse. Cogeneration plants are

designed for 50%. Any reduction in this

significantly increases boiler efficiency

Effective Evaporation Around 80%It is the measure of effectiveness of

evaporators

Reduced Boiling House

Recovery(RBHR)Min 90%

It is the measure of effectiveness of

complete boiling house (% extraction of

sugar available in mixed cane juice)

Steam % cane 34.5%

It is the measure of steam consumed in

the process as a percentage of total cane

crushed

Pol % Filtercake Max 1.5%

It is the measure of effectiveness of

vacuum filter (sucrose content lost with

filter cake)

Sugar Temperature Max 40 CTemperature of the sugar at the packing

stage

Sugar Moisture Max 0.03%Moisture in the sugar at the packing

stage


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1.5 Cost

The following is an estimated cost of a 2500 TCD mill expandable to 4000 TCD:

S.No Description Price (Mn USD)

1

Price for machinery and equipment for

juice extraction plant with in-line shredder

juice installation and 4 Nos 36"X78" size

millmax tandem 12.4

2


Boiling House suitable for 2500 TCD Sugar

plant 17.4

3


Centrifugal Station suitable for 2500 TCD

Sugar plant 2.5

4 Civil Costs 3.7

Total 36.0


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3.Cogeneration Power Plant


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2.1 Design

The power plant design is based on the rankine cycle efficiency, cost considerations, metallurgy,

operability, maintenance and specifications of similar bagasse based power plants.

The following is a representation of the proposed cogeneration scheme:


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Based on the information available, WE recommends a cogeneration plant of 18 MW capacity

for the project. The following table shows the capacity utilization (operating days) and the

output of the power plant in exportable units as the plantation and crushing capacity scale up:

Area of

Plantation

(Ha)

Cane

Yield(Per

Ha) TCD Bagasse(TPD)

Operation

Days

No. of

Units(Mn)

Exportable

8000 80 2500 750 270 61.72

9000 90 3000 900 280 74.87

10000 100 3500 1050 310 88.54

11000 100 4000 1200 330 100

12000 100 4000 1200 330 110

In Ours opinion, the following are indicative specifications of the 18 MW power plant.

This plant is designed for 24 hours of operation and the sugar mill needs to be run accordingly

to have uninterrupted supply of fuel. During off season, the stored bagasse will be used for

power generation.

The process steam requirement of the sugar plant is met from the steam extractions (High

pressure and Low pressure) at two different stages of the turbines. Apart from this mill steam

requirement, HP steam requirement and distillery steam requirement are also met from theseextractions. After meeting the power requirements of the sugar plant, excess power generated

by the power plant is exported to the grid. Transmission, and evacuation possibilities and costs

will be assessed during the feasibility study.

An HP heater is considered for the Co-gen plant from the point of view of a more efficient

power cycle, which means lower fuel consumption per unit of power generated. Appropriate


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water treatment plant along with RO and DM plants will have to be provided with suitable raw

water storage tanks to meet boiler water specifications and make up water requirements.

Systems like fuel handling, ash handling, switch yard, instrumentation air, control and

instrumentation will be designed based on the layout. It is also proposed to have a DCS type

data gathering and monitoring station, which will integrate the signals from boiler PLC, TG PLC

and the signals from the BOP consisting of cooling tower fans, cooling water pumps, DM plant,

water treatment plant and electrical system, so that the plant functioning can be monitored

from the DCS panel.


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2.2 Cost

The following is an estimate of the cost of an 18 MW power plant:

S.No Description Cost (Mn USD)

1 Boiler 9.0

2 Turbo Generator 6.1

3 Fuel & ash handling system1.1

4 Dense phase ash handling system

5 VFD 0.3

6 Main Cooling tower, CW Pumps & Valves 0.8

7 EOT crane 0.1

8 Switchyard 0.4

9 Transformers 0.7

10 LT panels - MCC& PCC 0.4

11 HT Panels-MCC&PCC 0.4

12 LT Package including lighting and earthing 0.4

13 LT contract & Busduct 0.6

14 Cables 0.5

15 Civil works& Chimney 3.0

16 Distributed Control System, BOP-Instrumentation 0.9

17 Piping & tanks 0.7

18 Water treatment plant 0.5

19 compressed air system 0.1

20 Ventillation system 0.1

21 Air conditioning system 0.0

22 Fire fighting system 0.2

23 Civil works 2.2

Total 28.8


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4.Distillery


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4.1 Design

The following is the layout and process flow of a typical distillery:

Molasses storage and Handling:

Molasses is stored in bulk storage and dry storage tanks of suitable capacity. The flow rate is

measured with magnetic flow meters which are connected to a Programmable Logic Controller

(PLC).

Fermentation:

It is a continuous fermentation process with suitable stainless steel tanks. These are providedwith plate heat exchangers for cooling. Equipment like level monitor, automatic PH monitoring

system, agitators and air blowers etc. are also provided to maintain the yeast population and to

combat bacterial infection.

A closed loop cooling tower system with an induced draftcooling tower with circulation pumps

is planned to ensure higher cooling efficiency and to minimize water wastages.


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Distillation:

Multi-pressure vacuum distillation is used because of many inherent advantages with the

technology. Primary column is of grid tray construction and the other columns are of superior

bubble cap construction (bubble cap gives good tray efficiencies at different conditions). All

these are connected and operated using PLC.

Effluent Treatment:

Effluent generated is around 400Cu.m/day with BOD of 65,000 mg/l and COD of 1, 20,000 mg/l.

This High BOD/COD Spent-Wash that is the effluent of the distillery is treated aerobically in a

closed digester and generated methane is captured in a controlled manner. The methane

captured is combusted in a boiler for steam generation and further to generate power through

a turbo-generator (used in the cogeneration boiler).

It is proposed to put up a distillery of capacity 40,000 litres per day with 96% v/v Rectified Spirit

as the main output. Molasses from the sugar mill is used as the raw material for this process.

The following table shows the capacity utilization of the distillery as the plantation and crushing

capacity scale up:

Area of

Plantaion(Ha)

Cane

Yield(Per

Ha) TCD

Molasses Per

Day (Tonnes)

Alcohol

(KLPD)

Operation

Days

8000 80 2500 100 30 270

9000 90 3000 120 36 270

10000 100 3500 140 40 284

11000 100 4000 160 40 324

12000 100 4000 160 40 340


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4.2 Cost

The following is a cost estimate of a 40 klpd distillery:

S.No Description Cost (Mn USD)

1 Continuous Fermentation1.1

2 Multi-pressure Vacuum Distillation1.3

3Utilities items like Cooling Towers, and Instrument Air

compressor / Tubing, insulation ,painting

0.24 Erection & Commissioning

0.3

5 Pumps electrical instrumentation of storage section

0.2

6 Water Treatment Plant 0.1

7 Molasses Bulk storage 0.7

8 Storage section for alcohol along with receivers0.2

9MS Structure for Fermentation, Distillation, alcohol storage

section 0.5

10 Biomethanation Plant2.3

11 Civil0.3

Total 7.2


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5 Indicative Financials and Deal Structure


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Project Cost

The total project cost has been estimated including revenue and cost of the alternate / inter-

crop and without including the same. The Project entailing plantation on 8,000 Ha, 2500 TCDSugar Mill, 18 MW Co-gen Power Plant and 40 KLPD Distillery in both the scenarios is as follows:

Item Without inter-crop

(USD MN)

With inter crop (USD

MN)

Land* 25.0 25.0

Plantation 27.5 11.5

Sugar Mill 36.0 36.0

Cogen Plant 28.8 28.8

Distillery 7.2 7.2

Total 124.5 109.0

* 8000 Ha @ USD 3125 / Ha

Although WE plans to enable interim cash flows by following the alternate / inter-crop strategy,

the same has not been assumed in the base case as a conservative estimate. Any cash flow

generated from the alternate / inter-crop would be ploughed back in to the project and would

reduce the project cost.


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The yearly phasing of the project cost for the base case is shown below

USD MN Jan-Dec-11 Jan-Dec-12 Jan-Dec-13 Total

Land Acquisition 25.0 - - 25.0

Plantation Project Cost 1.5 9.0 17.0 27.5

Sugar Mill Project Cost - 18.0 18.0 36.0

Power Plant Project Cost - 14.4 14.4 28.8

Distillery Project Cost - 3.6 3.6 7.2

Project Cost 26.5 45.0 53.0 124.5

5.1 Means of Finance

The Project expected to be funded in the debt equity ratio of 75:25. With 75:25 debt equity

ratio, the funding requirements of the Project is as follows:

Debt 93.5

Equity 31.0

Total 124.5

The land would be valued at USD 3,125/Ha amounting to USD 25.0 MN for 8,000 Ha. This land

will be contributed in form of equity for the Project in the name o company as 49 or 99 yearslease agreement.


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The annual phasing of funds that need to be invested in the project is shown below:

USD MN Jan -Dec-11 Jan -Dec-12 Jan-Dec-13 Total


Plantation Cost 1.5 9.0 17.0 27.5

Sugar Mill Cost - 18.0 18.0 36.0

Power Plant Cost - 14.4 14.4 28.8


Project Cost 26.5 45.0 53.0 124.5

Debt 0% 95% 95%

Debt Value - 43.2 50.3 93.5

Land 25.0 - - 25.0

Cash 1.5 2.0 2.5 6.0

Equity Value 26.5 2.0 2.5 31.0

5.2 Integrated Project Financials ;

We have calculated Project cash flows starting from CY11 (Jan-Dec) to CY 28 (3 years of

plantation + 15 years of operations of Sugar mill, Co-gen Power Plant and Distillery). The

combined financials for the Project are given below. In our base case analysis (i.e. without

assuming intercrop plantation) the Project yields equity IRR of 28%


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KEY PROJECT ASSUMPTIONS

1. PLANTATION

Land Area Ha 8,000

Land Value/Ha USD 3,125

Land Acquisition USD 25,000,000

Clearance Cost USD 1,000

Land Clearance - Phase 1 Ha 1,100

Duration Months 12

Land Clearance - Phase 2 Ha 6,900

Duration Ha 12

Sugar Cane Plantation (Seed Import) Ha 125

Sugar Cane Seed Yield Ha 8

Cost of Plantation including Labor USD 1,150

Escalation on Plantation Cost USD 5%

Sugar Harvesting - Phase 1 Months 10

Sugar Cane Yield - Dec 14 T/Ha 70



Sugar Cane Price USD 25

Escalation on Sugar Cane Prices % 5%


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2. SUGAR MILL

TCD T/Day 2,500

Project Cost / TCD USD 14,400

Project Cost USD 36,000,000

Operational Days - 1st Year Days 224

Operational Days - 2nd Year Days 256

Operational Days - 3rd Year onwards Days 288

O&M Cost % 8%

O&M Cost Escalation % 5%

Cost of Sugar Cane Procurement USD 25

Sugar Cane Cost Escalation USD 5%

Sugar Wholesale Price USD/Kg 0.50

Sugar Mill Electricity Consumption kWhr/TC 28

Steam Consumption by Mill MW 3


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3. CO-GEN POWER PLANT

Capacity MW 18

Project Cost / MW USD 1,600,000

Project Cost USD 28,800,000

Operational Days - 1st Year Days 224

Operational Days - 2nd Year Days 256

Operational Days - 3rd Year onwards Days 288

O&M Cost % 8%

O&M Cost Escalation % 5%

Tariff USD 0.12

CER Value USD 8.00

Auxiliary Consumption % 12%

Transmission and Other Losses % 5%

Bagasse Fuel Consumption Norm kg/Kwhr 1.90

4. DISTILLERY

Capacity KLPD 40

Project Cost / MW US$ 180,000

Project Cost US$ 7,200,000

O&M Cost % 8%

Ethanol Yield lit/T 256

Ethanol Price US$/lit 0.70

Electricity Consumption - 1st Year MW 1.5


36/37

Mr Dawdas Thinking

USD MN Jan -Dec-11 Jan -Dec-12 Jan-Dec-13 Total


Land Will Be Acquired By Shree HasmukhBhai For Company In the name of Company , In East

Africa land owned on 49 or 99 Years lease, This land may cost 500 $ per acre.

Plantation Cost 8.5 9.0 17.0 27.5

Inter Crop Cost6.5

1.5 ( 5M Revenue

from Inter Crop)

7.5M From

Inter Crop (- 1M)

Equty Required

16 M

4M-5M Hasmukh

Bhai willing (

Arrange) to put as

equity at this stage

Sugar Mill Cost - 18.0 18.0 36.0

Power Plant Cost - 14.4 14.4 28.8


Project Cost 26.5 45.0 53.0 124.5


37/37

Means of Finance

The Project expected to be funded in the debt equity ratio of 75:25. With 75:25 debt equity

ratio, the funding requirements of the Project is as follows:

Debt 93.5

Equity 31.0

Total 124.5

The land would be valued at USD 3,125/Ha amounting to USD 25.0 MN for 8,000 Ha. This land

will be contributed in form of equity for the Project in the name o company as 49 or 99 years

lease agreement.

1408 uganda sugar proposal q 1-7-22

Documents