Base Carbon Agreement and Citigroup with Carbon Reduction Project Developer in Vietnam - Benzinga

Base Carbon Agreement and Citigroup with Carbon Reduction Project Developer in Vietnam – Benzinga

TORONTO, May 27, 2022 (GLOBE NEWSWIRE) – Base Carbon Inc. (New: BCBN) (Carbon base“, or the”companyto announce that it has executed an agreement, through Base Carbon Capital Partners Corp. (“)Carbon Core Capital“), to facilitate the development of cooking stoves and a low carbon water purification project in Vietnam (”project“) with the Sustainable Investment Development and Development Company (“sepcoCitigroup Global Markets Limited (“), as an in-country project developer.City Group‘) is the return on the SIPCO carbon credit for the project.

Highlights:

  • Entering into a project agreement with SIPCO to develop a cooking stove carbon reduction and water purification project in Vietnam;
  • Facilitating a project purchase agreement between Citigroup and SEPCO;
  • Expected initial investment of approximately $20.8 million over 24 months;
  • The project is expected to generate approximately 26.6 million carbon credits over 10 years;
  • The project documentation with SIPCO states the expected net present value of the project (“net present value“) * $78.6 million IRR (“)IR”) * 66% at $10.00 (illustrative) carbon credit rate; and
  • 2.75 years of expected return on total capital commitments (from the first dollar published) regardless of market-based carbon pricing.

The project is expected to generate approximately 26.6 million voluntary carbon credits over an estimated 10-year period from the distribution of approximately 850,000 cook stoves and 364,000 water purifiers to participating households in Vietnam. Cook stoves improve home energy efficiency by reducing the combustible biomass needed for daily household activities such as cooking and heating, while water purifiers can eliminate the need to boil water for safe consumption. Both types of devices are recognized under well-established methodologies to reduce carbon with additional and far-reaching social benefits. The project is registered in Verra’s VCS under Project IDs 2548 And 2557.

Base Carbon Capital will advance the total purchase price of the project’s carbon credits of approximately $20.8 million in expected regular payments over the next 24 months. As per the terms of the project agreement with SIPCO, the upfront purchase price payment will primarily finance the manufacture and distribution of cook stoves and water purifiers as well as some costs related to initial distribution and project monitoring. Each pre-payment will be conditional on key development stages and conditions such as delivery of devices and distribution to participating households.

Based on the project documents, SEPCO will repurchase the first 7.4 million carbon credits from the project in exchange for the purchase. Furthermore, approximately 19.2 million additional carbon credits are expected to be generated which can be sold by Base Carbon Capital either to SIPCO, pursuant to the option agreement, or in the open voluntary carbon credit market (or a combination thereof).

Based on project documentation with SIPCO and forecasts for generating carbon credits, Base Carbon Capital expects to achieve a payback of 2.75 years on total published capital, and based on an illustrative selling price of $10.00 per carbon credit for an additional 19.2 million expected credits, Base estimated NPV For the project attributed to Carbon Capital* for a total of $78.6 million with an IRR of 66%. For clarity, the carbon credit selling price of US$10.00 is for illustration only, and the price of carbon credits in the market may be higher or lower at the time of sale.

“The project is an essential addition to the Base Carbon portfolio of projects, and our commitment to project development enhances our efforts to become the trusted developer, producer and financier of carbon credits. This capital commitment provides primary carbon stakeholders exposure to a carbon source. Reducing assets with an expected multiplier of cash capital returns, The size of the core balance sheet, with diluted capital at risk through (i) attractive payback periods, (ii) a partnership with our experienced in-state project partners, SIPCO, and (iii) a carbon credit contracted between SEPCO and Citigroup. To further our partnership with SEPCO as we collectively see the project through to completion,” said Michael Costa, CEO of Base Carbon.

“The project is aligned with Base Carbon’s business model that focuses on identifying and developing high-quality carbon reduction projects. Base seeks to maximize the range of economic, environmental and social returns while assisting our partners with their energy transition goals. This transaction structure of the project will enable our partner within The country, SEPCO, is able to share in the expected project returns while achieving a noteworthy and measurable social impact in Vietnam,” noted Philip Hardwick, Chief Operating Officer at Base Carbon.

*NPV (or Net Present Value) is defined as the difference between the sum of the present value of the cash inflows and the sum of the present value of the project’s cash outflows. For project purposes (in aggregate), the NPV is shown on a pre-tax basis and is calculated over a period of approximately 10 years at a discount rate of 5%. IRR (or internal rate of return) is defined as the rate of return that makes the net present value of all cash flows equal to zero and is calculated for the project using the same time periods specified above and presented on a pre-tax basis.

about carbon base

Base Carbon provides capital, development expertise, and management of operational resources to projects that engage primarily in the voluntary carbon markets and the broader ESG economy. Base Carbon strives to be the Carbon Venture’s partner of choice in providing development capital and resources to carbon projects globally and, where appropriate, will seek to use technologies in the evolving carbon industry to enhance efficiencies, commercial credibility and trade transparency. For more information, please visit the website www.basecarbon.com.

About the Sustainable Investment Development and Development Company (SIPCO)

SEPCO was established in 2019 and is primarily focused on creating a highly competitive carbon portfolio under the supervision of the Board of Directors of Investment and Trading Consulting Limited (“Intraco”). INTRACO, the owner and general manager of SIPCO, was established in 2001 as an environmental and safety management consulting firm, focusing on carbon credit projects for the Clean Development Mechanism (CDM) since 2007. INTRACO has grown into a professional, experienced and market leader in consulting and automated project development Clean development in Vietnam, where 113 clean development mechanism projects and 8 Programs of Activities (POAs) have been completed very far. Intraco’s portfolio includes projects in nearly every sector of the Clean Development Mechanism, including oil and gas, renewable energy, biogas, biomass, energy efficiency and fuel switching. INTRACO implements programs that provide people with energy-efficient cook stoves, clean drinking water and renewable electricity in partnership with many well-known institutional clients.

Investor Relations Contact:

Megana Nair
Investor Relations Manager
Tel: +1647952 3979
email: Investorrelations@basecarbon.com

Michael Costa, CEO, and Ryan Hornby, Chief Legal Officer are responsible for this press release.

Cautionary statements regarding forward-looking information

This press release contains “forward-looking information” within the meaning of applicable securities laws relating to the project, focus on Base Carbon’s business and the company’s financial results. Any forward-looking statements may be identified by words such as “expect,” “expect,” “intend,” “think,” “believe,” “project,” “plan” and similar expressions. Readers are cautioned against excessive reliance on forward-looking statements.

Data on, among other things, the successful generation of carbon credits from the project, projected and estimated project cash flows and costs including NPV and IRR estimates, project timelines including projected capital deployment schedules and payback periods and all of Base Carbon’s overall strategic plans Forward-looking information. These statements should not be read as guarantees of future performance or results. Such statements involve known and unknown risks, uncertainties and other factors that could cause actual results, performance or achievements to be materially different from those implied by such statements.

In relation to a project, some of the factors that affect the commercial success of a project include, among others: (i) the company’s experience with respect to appraisal, planning and project negotiation, (ii) the behavior of project counterparties, (iii) project costs and carbon credit market prices. , and (iv) the ongoing monitoring of the project and the issuance of carbon credits by Verra. In relation to the project, some of the assumptions that affect the commercial success of the project include, among others: (i) continued development of the project in line with projected schedules and costs, (ii) project counterparties, including SIPCO and Verra, operating procedures Contractual and/or Standard, (3) Manufacturers and distributors contracted by the Company and SEPCO in relation to cook stoves and water purifiers fulfill their obligations as expected and within the expected schedules, (4) Participating local households use the cooking stoves and water purifiers provided to them As per projections under the project which are then reflected by monitoring reports accepted by Verra, and (v) the Company has sufficient funds on hand to make carbon credit purchase price payments.

NPV (or net present value) is defined as the difference between the sum of the present value of the cash inflows and the sum of the present value of the cash outflows of the project. For project purposes (in aggregate), the NPV is shown on a pre-tax basis and is calculated over a period of approximately 10 years at a discount rate of 5%. IRR (or internal rate of return) is defined as the rate of return that makes the net present value of all cash flows equal to zero and is calculated for the project using the same time periods specified above and presented on a pre-tax basis.

Calculate the net present value and internal rate of return using the projected and estimated cost of the project and the cash flows derived from the project documentation. Many of the factors and assumptions that may affect the accuracy of such forward-looking calculations are the same as those that affect the success of a project. These statements should not be read as guarantees of future performance or results.

Base Carbon assumes no responsibility to update or revise forward-looking information to reflect new events, conditions, or actual results unless required by applicable law. When available, readers are encouraged to consult the company’s MD&A available at www.sedar.com “ www.sedar.com For information about risks and other factors that may affect Base Carbon’s business objectives and strategic plans.


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