Timber firm- York Timbers, has announced plans to construct an electrical biomass power plant in South Africa at its timber plant worth US $0.10bn.
This new power plant by the firm will deliver 25MW into the South African National grid thus giving the company some energy income from what would otherwise be discarded as biomass waste production from its six timber plants.
According to the CEO of York Timber, Pieter van Zyl, the power plant project would also help diversify the earning base of the lumber, plywood, wholesale and plantation providers. It would also help the company participate in the forth bid window of the Department of Energy’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) which will close in November 11.
Van Zyl also noted that the company will strengthen its earnings before interest, taxes, depreciation, and amortization, generating capability while at the same time diversifying its earnings and extract increased value from biomass production.
To aid the company participate in the empowerment-conscious REIPPPP, York created a ring fenced company named York Timber Energy which would be 25 percent owned by the local community and staff through a trust fund while the remaining 75 percent will be owned by the parent company.
Van Zyl further noted that the biomass power plant in South Africa will incorporate Austrian technology and it will give them 10 to 20 years of predicted cash flow.