We estimate the company could record first revenue from its Italy acquisitions in the third fiscal quarter beginning July 2015. All four biogas plants are in operation and sell electricity to the country’s electric grid. Each has a rated capacity of one megawatt power production through anaerobic digestion of agriculture waste to biogas that powers an electric generator. The $1.3 million purchase price for each of the facilities will be paid in two installments. Financing arrangements have been made through an Israel-based investment fund. We expect final closing requirements to be completed by near the end of June 2015. Another three deals are in the pipeline in Italy.
After several challenging months of negotiation Blue Sphere management has arranged financing and commenced construction on a 5.2 megawatt biogas power plant in North Carolina and a similar 3.2 megawatt facility in Rhode Island. The Company has entered into joint ventures with investment fund York Capital, which is funding construction and working capital. Blue Sphere will lay claim to 25% and 22.5% of the North Carolina and Rhode Island joint ventures, respectively. Construction has begun on both projects with completion time within approximately twelve months. We expect both plants to be operational in 2016.
The company is pushing forward with two additional ‘greenstart’ biogas plants. Management is working to secure a power purchase agreement for a 5.2 megawatt plant planned near Middleboro, MA, where local governments are keen on keeping food waste out of landfills. Another waste-to-energy biogas plant is planned near Ramat Chovav, Israel. The project would for the first time give Blue Sphere an operating presence in its home country.
On the brighter side, BLSP is trading under dramatically higher volumes than six months ago, suggesting that the market is clearing out share supply underpinning bearish sentiment in the stock. Management clearly thinks the stock is undervalued after instituting a share repurchase plan and engaging a strategic investment advisor.