The board is pleased to announce that the company has entered a joint venture with Clean Gen Ltd. Together Raw AD and CleanGen will work together to develop Anaerobic Digestion (AD) plants in the United Kingdom. CleanGen brings their UK agricultural industry experience and reach to farmers and landowners across the country to build an impressive portfolio of optimal projects for the groups advancement.
Mr. Mark Falshaw, CEO of CleanGen has stated: “ for the last 2 years I was developing AD plants in the region of York based on agricultural substrates, but was looking for the right partner to develop the business model with. The partnership set with Raw AD suits CleanGen’s strategy to expand rapidly, and become a leading player in the market. We are looking forward to develop within the next 2 – 3 years several AD plants of approximately 10Mw”.
Ms. Asnat Drouianov, CEO of Raw AD added: “We were very impressed with the CleanGen team who had the vision we were looking for in our plans to expand the adoption of AD in the UK. This joint venture brings together the myriad of abilities that are required to meet both of our companies respective goals. With the cementing of this agreement we have broadened our offering to customers and investors alike and we expect to make an announcement in a few weeks detailing that.”
We are delighted to announce that we have received a mandate to finance two new biogas projects near Skipton in Yorkshire. The total project cost of each plant is £4.5 million with a required equity portion of £1.35 million, the remainder will be provided by our finance partner as debt on very favourable terms. The IRR (internal rate of return) of these plants is considerably assisted because they benefit from the Renewable Heat Incentive (RHI). This occurs because the biogas is fed into the national gas grid where the plant owner claims an RHI incentive of 7p per KW/h and a payment of 3p per KW/h for the base gas. This generates a 33% before-tax IRR over 5 years.
The projects can receive EIS approval and be put into a VCT (Venture Capital Trust) fund where the investor receives 30% income tax as well as possibly 28% capital gains tax deferrals. By using a VCT investors can obtain a 48% after-tax IRR over 6 years paid as tax-free quarterly dividends from the VCT.
On 29 October 2012, Raw AD received its pre-approval to raise funds under the EIS regulations. This has been the result of months of preparations to ensure that the business would be compliant with the stipulations made by HMRC regarding the eligibility for investors to benefit from the EIS structure.
Raw AD wants to maximize the value created for investors and the company was created in such a way that it is ideally suited to the EIS structure. This pre-approval means that the Raw AD EIS structure has been scrutinized by the tax specialists at HMRC, and that they are satisfied that the investment is compliant. This should bring further assurance to investors who are not familiar with EIS investments.
Expect a further notice in a few weeks time about how to invest in the Raw AD opportunity via the EIS structure, along with further information on the projects we are undertaking.