| Project description |
The project involves the construction and operation of three landfill gas to energy (LFGTE) projects in China at Dalian in Liaoning Province and Huizhou and Huiyang in Guangdong Province. For each LFGTE project, there will be a network of vertical landfill gas (LFG) extraction wells, a LFG conveyance system, a blower station, an enclosed flare, and a LFG fueled internal combustion engine(s) for the generation of electricity that will be sold to the local power grid.
PhasCon is implementing a Clean Development Mechanism (CDM) project at each LFGTE project based on the capture of fugitive methane from the landfills at each site. Jointly or independently with the landfill operator at each site, PhasCon will undertake the following:
- Designing, constructing, and maintaining a one meter thick landfill cover system to divert storm water, prevent storm water infiltration, and enhance the anaerobic degradation of the in-place waste;
- Designing, installing and operating the LFG collection system to limit fugitive emissions of methane;
- Designing, installing and operating a leachate recirculation system for leachate pretreatment while enhancing the degradation of the in-place waste;
- Designing, constructing and operating a power generation system that uses the captured methane to generate electricity;
- Establishing an Internet-based communication, monitoring and control system for operating LFG recovery, power generation systems and leachate recycling on a regional basis; and,
- Assist the landfill operator with respect to waste placement and management, and the construction of leachate and LFG management systems during waste placement.
Each project will be developed in two stages. During the first stage, the final cover system for the landfill, the leachate recirculation system (where applicable) and the LFG collection and conveyance systems will be constructed. The collected LFG will be thermally treated in the enclosed landfill gas flare. In the second stage, the LFG fueled power generation equipment will be installed at the site and a grid connection established by the electric company, as required by the Chinese Renewable Energy Law. The law also requires the electric companies to purchase the power from LFG projects. During the second stage, LFG will be consumed by the power generation equipment, while the enclosed flare will serve as a backup LFG treatment system.
Each LFGTE project will reduce greenhouse gas (GHG) emissions through the capture and treatment of fugitive methane and the displacement of grid-based power, which is primarily supplied by coal-fired power stations, with power generated from the projects. PhasCon intends to register each LFGTE project as a CDM project, as provided for under the Kyoto Protocol, generate Certified Emission Reductions (CERs), and sell these CERs to the IFC-Netherlands Carbon Facility (INCaF). |
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| Project sponsor and major shareholders of project company |
Shenzhen PhasCon Technologies Co. Ltd (or PhasCon) was founded in 2001 and its main business at that time was the R&D of energy efficiency technologies and the manufacturing of energy-saving products. In 2003, PhasCon became a Foreign Joint Venture Company with a Canadian investor’s participation in both financial investment and landfill gas (LFG) collection and utilization technology transfer to focus on LFG projects. PhasCon is registered as a Sino-Canadian joint venture company, 75% of which is owned by the Chinese partner, Dr. YU Yuanqi, and 25% of which is owned by the Canadian partner, Mr. Gerry Hamaliuk. PhasCon will be the full and direct owner of the Huizhou and Huiyang LFGTE projects, and will own 80% of the Dalian LFGTE project through Dalian PhasCon Technologies Co., Ltd., which was established exclusively own the project in Dalian. PhasCon is the company’s main shareholder and owns 80% of the total shares. The remaining 20% are owned by two employees of the Dalian subsidiary company, Mr. LI Chengbin and Ms. LUO Mei.
PhasCon won a Chinese National Enterprise New Record Award in 2002 on its energy efficiency technology for its A/C motor and an UNIDO Blue Sky award for its work on Meizhou Landfill Gas Recovery as Power Project, which has been operating since 2006 at Meizhou in Guangdong Province, China. |
| Total project cost and amount and nature of IFC's investment |
| PhasCon estimates that the capital cost of the three LFG projects will be $5.0 million and will generate approximately 2.0 million CERs during the 2008-2012 period. INCaF intends to provide an advance payment of $1.9 million against the purchase of CERs from the project. The total value of the INCaF purchase contract is expected to be in the range of $21 - $28 million payable in installments on delivery of CERs (generated through to the end of 2012) to the CDM registry account of the Netherlands. |
| Location of project and description of site |
The Dalian site is located in the Ganjingzi District of Dalian City in Liaoning Province in northeastern China and comprises three Phases. The landfill is located between Bohai Bay, on which the city of Dalian is located, and the Shenda Highway, which is the north-south road between Dalian and Shenyang. An overpass for exit from the highway was recently built over Phase 1 of the landfill, which will not be capped or used for LFG collection. The LFGTE project is under construction and only contemplates the collection of gas from Phase 2 and Phase 3 of the existing landfill. Active landfilling is only taking place in Phase 3. Both Phase 2 and 3 of the landfill were constructed with lined cells and have been provided with a leachate collection system. Collected leachate from the landfill phases is conveyed to an on-site treatment plant, prior to either discharge to the Bohai Bay or recirculation into the landfill to increase LFG production. Phase 2 has been capped and LFG extraction wells and conveyance lines have been installed. In Phase 3, LFG extraction wells are being constructed concurrently with the waste placement activities.
The Huiyang site is located in the Qiaobei Village, Huiyang District of Huizhou City in Guangdong Province in southern China. The Huiyang District lies approximately 20 kilometers south from the center of Huizhou City. The LFGTE project will be located on the currently active Phase 1 of the landfill. The landfill was constructed with a bottom liner and has a leachate collection system. Collected leachate from the landfill is conveyed to an on-site pond, from which it is pumped to an on-site treatment plant, prior to discharge to the adjacent Danshui River. As part of the Huiyang LFGTE project, leachate may be re-circulated through the landfill. Gas collection wells are being constructed concurrent with the waste placement activities.
The Huizhou site is located four kilometers west of downtown Huizhou City in Guangdong Province in southern China. The landfill comprises four general areas, the inactive Phase 1 waste landfill, the active Phase 2 waste landfill, the new ash landfill cell, and the future ash landfill cell. The LFGTE project only contemplates LFG collection from the inactive Phase 1 waste landfill. Leachate from the project area drains to a leachate collection pond, from where it is pumped via pipe to an offsite waste water treatment facility. The project area at Huizhou has been partially capped and no LFG wells have been constructed yet. |
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| Anticipated development impact of the project |
| IFC’s goal is to encourage emerging market private sector participation in the carbon market by providing value-added services to support project’s long term sustainability. As a global investor and advisor committed to developing a sustainable private sector in emerging markets, IFC is well positioned to assist project sponsors to participate in the carbon market. |
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| IFC's expected development contribution |
| IFC’s experience and knowledge in evaluating and financing private sector projects in developing countries is leveraged to structure contracts that minimize the risks associated with the delivery of CERs from the projects. The provision of a partial advance payment against the future delivery of CERs will allow PhasCon to finance the capital cost of these three LFG project and the sale of CERs from the LFG projects will allow PhasCon to fund an expansion of its LFG project development in China. |
| Environmental and social issues - Category B |
This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects because a limited number of specific environmental and social impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The appraisal of this project included visit to the Dalian landfill where construction have already been completed, as well as to the proposed construction sites at the Huiyang and Huizhou landfills.
The following potential environmental, health and safety and social aspects of the LFGTE projects were evaluated: regulatory compliance, environmental impacts, public health impacts, social impacts, worker health and safety, public consultation and disclosure, company labor practices, and management of pollutants and wastes during construction of the LFG project, community safety.
To view the environmental documents for this project, click here |
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| For inquiries about the project, contact: |
Dr. YU Yuanqi, Chairman of the Board
Fangda Plaza, Room 1809
Hi-Tech Industrial Park
Nanshan, Shenzhen
518063, P.R. China
Office phone: +86 755 8368-4102
Office fax: +86 755 8368-4179
Mobile phone: +86 139-2342-3848 |
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| For inquiries and comments about IFC, contact: |
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster |
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