Wasabi raises Carbon stakes

THE BOURSE WHISPERER: Wasabi Energy has increased its stake in AAP Carbon from the 25 per cent it purchased in March this year to 62.5 per cent.

Wasabi’s power business is based on its proprietary Kalina Cycle® power generation technology which utilises low grade, waste heat from industrial facilities or geothermal sources to produce electricity.

AAP Carbon builds, accredits and invests in clean energy projects that generate carbon credits under the Clean Development Mechanism of the Kyoto Protocol.

According to Wasabi Energy, AAP Carbon’s focus has been the energy intensive ferrochrome industry where it harvests the off‐gases from furnaces for conversion into electricity by using gas‐fuel reciprocating engines.

Wasabi said the two companies will offer a combination of chemical and thermal energy conversion to electricity for Sub Saharan Africa.

 “Wasabi Energy has been working closely with AAP Carbon since early 2012,” Wasabi Energy executive chairman John Byrne said in the company’s announcement to the Australian Securities Exchange.

“We are impressed with the opportunities available to the group in South Africa and Sub Saharan Africa with a number of projects being well advanced.

“The joining together of AAP Carbon with Wasabi Energy’s business development activities provides a powerful combination of expertise, proven track record in the development and implementation of projects and a unique offering with the combination of chemical and thermal energy conversion with the use of the Kalina Cycle®.

Wasabi identified Sub Saharan Africa to be one of the world’s fastest growing regions, highlighting World Bank statistics indicating real growth at 5 per cent of GDP.

Although provision of reliable power is a key component to ensure ongoing economic growth, the region endures issues affecting levels of industrial activity resulting in a need to develop energy conversion of waste heat to power for industrial applications.

“We look forward to the growth in AAP Carbon and the development of a leading African power company,” Byrne said.

“Southern Africa is not alone in its requirement for reliable power, and the demand from around the world for the Kalina Cycle® continues to grow.

“We are therefore confident that through this and other licensees our growth targets will be achieved.”

Under the terms of the transaction, AAP Carbon will be granted a Kalina Cycle® license for Sub Saharan Africa which, together with its existing chemical energy conversion business, Wasabi is confident will deliver a unique offering to the African market.

AAP Carbon will issue 15.2 million new shares and 4.7 million warrants exercisable at 10 cent each to Wasabi as consideration for an exclusive Kalina Cycle® license (excluding the cement and lime industry which has been granted to FLSmidth) and Wasabi’s business development activities in Sub Saharan Africa, which include the engineering study for two Kalina Cycle® power plants at ArcelorMittal’s Vanderbijlpark steel works and several other projects in South Africa and Kenya.