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Clenergen Corporation Signs Agreement to Operate a 27MW Biomass Power Plant in India

Florida based American company Clenergen(otcqb:CRGE) had recently entered into an agreement with Yuken India Limited to Install a 4 MW/h Gasification Power Biomass Plant operating on gas engines at their manufacturing facility in Bangalore, India. The company had been in the news a few months ago for acquiring 5000 acres on a long lease for a 32 MW project and had gotten into contracts for plantation trails recently.

A couple of weeks back, Clenergen announced the commencement of the full power generation of their 18MW combustion steam technology plant situated in Tamil Nadu.

Clenergen  is also one of the first American companies in India, that has undertaken Bio-fuels and plantations with agronomy management services from local universities and biotech companies in India.

The company seems to continue with its impressive growth plans and execution track record with the signing of yet another agreement, this time to Operate a 27MW  Biomass Power Plant that is expected to be fully operational by first quarter 2011.

Clenergen Corporation Signs Agreement to Operate a 27MW/h Biomass Power Plant in India and Is Expected to Be Fully Operational by First Quarter 2011

CHENNAI, INDIA, Nov 30, 2010 (MARKETWIRE via COMTEX) — Clenergen Corporation (otcqb:CRGE)(frankfurt:9CE) today announced that it has entered into a Memorandum of Agreement (“MOA”) with SV Sugar Mills Limited (“SVS”) to take over operations of an existing 27MW/h biomass power plant (the “Plant”), which has the ability increase Clenergen’s operating capacity to 51.5MW/h by the end of 2011 and projected run rate revenues to circa $40 million per annum.

The biomass power plant is located next to the Clenergen’s own 18MW/h plant in Kancheepuram, Tamilnadu, India. SVS will be responsible for funding all capital expenditure relating to the plant and, through an operating lease, Clenergen will be responsible for running the Plant and supplying SVS with a proportion of the power output.

Once certain refurbishment works are complete, it is expected that the Plant will operate at 80% capacity and generate a net 22MW/h of electricity per annum, operating on a 24 hour basis, with the balance of which will be sold through merchant power trading contracts at premium tariffs.

In addition to operating the Plant, Clenergen intends to contract with SVS for the supply of bagasse from its sugar mill during the six month sugar cane season. Clenergen will use the bagasse as sustainable feedstock for its 18MW biomass plant and due to the proximity of the 2 plants transport costs will be dramatically reduced. The quantity of bagasse biomass in season is sufficient to operate the power plant throughout the year.

Further collaboration between SVS and Clenergen is also being explored whereby Clenergen intends to procure the biogas (methane) from SVS to fuel a 2MW/h gas generator to be located at its existing 18MW/h biomass power plant site. Also, as SVS’s operations extend to the procurement of wood chips from West Africa, SE Asia and South America. Clenergen and SVS are exploring the options for collaboration on fuel stock supplies.

Commenting on the MOA, Mark Quinn, Executive Chairman of Clenergen Corporation, said “The agreement provides us a turnkey operation which will be managed by our team already based in Kancheepuram. The supply of bagasse biomass at a fixed cost to per annum allows the company to maximise its profit margins at the capacity levels being projected”.

It is interesting that Clenergen has established such a strong presence in Chennai, Tamil Nadu where two major green power companies ( Orient Green Power Limited, AuroMira Energy) are head quartered both with a strong biomass presence and portfolio.

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