CG/LA Infrastructure's InfraBlog
PFI Issue 500 – March 13, 2013
Belo Horizonte wants to start a US$230m waste-to-energy plant whereby the private sector will build the plant, transport waste there and operate the infrastructure under a 35-year concession. The government will provide a direct subsidy of US$44/t, which would provide an estimated internal rate of return of 12%.
The estimated payback would be 10.5 years. The government would insure a minimum revenue guarantee of 70% and give the winning bidder technical flexibility.
The winning bidder would be selected based on the price and the landfill reduction. At present, the Belo Horizonte area has about 30% landfills, 40% illegal dumps and the rest inadequate landfills for its waste control.
This project would provide low demand risk, environmental appeal and technical flexibility, the government said.
The RFP is scheduled to go out in May 2013, followed by the proposal deliveries five months later. In November 2013, the preferred bidder would be selected, and the contract signed the following month. The plant is expected to start operating in December 2014. The plan was announced at the recent CG/LA Global Infrastructure Leadership Forum.
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