By Hilbert Haar
PHILIPSBURG – When former Minister of Public Housing, Urban Planning, Environment and Infrastructure (VROMI) Christophe Emmanuel signed a memorandum of understanding with the Canadian company Envirogreen Energy Inc. on June 8, 2017, about the construction of a waste-to-energy facility on Pond Island, the company did not exist.
This appears from an extract stmaartennews.com obtained from the commercial register in British Colombia. Registrar Carol Prest only incorporated Envirogreen Energy under the Business Corporations Act on October 6, 2017 – four months after Emmanuel signed the memorandum of understanding with one Rick Matis (see photo) who is, according to the memorandum a partner in Envirogreen.
Envirogreen’s new website describes Matis however as its Chief Executive Director and his experience includes “project management and procurement of a waste-to-energy recycling project in the Philippines.”
According to a brief article dated August 17, 2016, in Recycling Magazine, the Japanese company Hitachi Zosen is in the process of constructing the first waste-to-energy plant for the Philippines in Manila. This plant is expected to be operational in 2020.
Stmaartennews.com did not find any link between Hitachi Zosen and Envirogreen (because the latter company did not exist in 2016) or between Hitachi Zosen and Rick Matis. There are no reports about other waste-to-energy plants in the Philippines.
Interestingly, on the same day the company was incorporated in Canada, Emmanuel addressed a letter to the chairman of the supervisory board on utilities company GEBE, Bienvenido Richardson with a request to put the draft power purchase agreement on the agenda of the next meeting of the supervisory board.
Emmanuel asked for “an immediate approval” citing “the history of the document and the serious situation the island is presently in after the passing of Hurricane Irma.”
So far, only Bienvenido Richardson and board member Tadzio Bervoets have signed for approval of the power purchase agreement that binds GEBE to buy electricity from Envirogreen for the next 25 years at $0.26 per kilowatt.
According to the National Energy Policy of 2014, it costs GEBE $0.22 to produce a kilowatt of electricity. the average cost of producing electricity from waste-to-energy in the United States is between $0.08 and $0.12 per kilowatt.
These numbers show that the price Envirogreen wants to charge GEBE for its electricity is almost 18.2 percent above the current production cost in St. Maarten.
Another document obtained by stmaartennews.com outlines the status of Envirogreen as a special purpose company “set up solely for the purpose of implementing and operating the (waste-to-energy) plant in accordance with the terms of the concession agreement.”
Given the fact that Envirogreen was only incorporated four months ago, the company cannot provide St. Maarten with financial statements over the past five years.
However, the document states: “Envirogreen and its partners for this special purpose company have a combined value of more than $100 million and leverage value of $300 million, more than sufficient to finance this project and bring it to fruition.”
While this sounds reassuring, the fact that Envirogreen is a special purpose company should set off some alarms. Special purpose entities are typically set up to isolate the firm that funds such a company from financial risk.
One of the reasons for using a special purpose company is asset transfer. Many permits required to operate certain assets (such as power plants) are either non-transferable or difficult to transfer. By having an special purpose company own the asset and all the permits, it can be sold as a self-contained package, rather than attempting to assign over numerous permits.
Photo caption: Envirogreen Chief Executive Director Rick Matis. Photo LinkedIn.
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