Recor, a South African waste-to-energy company, intends to appoint financial and technical advisors for a project in the City of Tshwane that could cost up to USD 50m said Managing Director Gideon Potgieter.
The City of Tshwane in Gauteng Province awarded Recor the tender to convert landfill gas at up to 10 landfill sites into compressed natural gas (CNG).
It will seek to appoint advisors by March following which it will conduct further feasibility work, said the MD.
The Industrial Development Corporation (IDC) said it may be willing to fund 60% to 70% of the project through debt, said Potgieter, and now Recor is looking for equity partners to provide the remaining 30% to 40%.
The WTE company is targeting an Internal Rate of Return (IRR) of over 25% and welcomes approaches from equity investors, said Potgieter.
Subject to the results of the feasibility work, Recor plans to develop USD 5m CNG plants at each of the 10 landfill sites in Tshwane, Potgieter explained. Each plant will take around six months to complete, he said. The first CNG plant could become operational sometime in 2018.
It is envisioned that each CNG plant will process about 1,000 cubic meters (m3) of landfill gas per hour to produce about 500-700m3 of CNG per hour, said Potgieter.
Recor hopes to wrap up an off-take agreement for the CNG produced in the coming months, he added.