A few months ago, I mused that our first significant income would come from our Best of Breed program.
Recent developments are making me feel more comfortable with that thought.
To remind you, our Best of Breed program was designed to leverage the many relationships that we have established as a result of Natcore’s branding and technology. We’re taking advantage of these relationships to assemble the most appropriate team based on the requirements, size and scope of a project, as well as its geography.
Well, we now have three Best of Breed projects in the pipeline. They’re in far-flung locales: Belize, the Middle East, and Vietnam.
The Vietnamese project has the most traction and seems to be moving most quickly. Natcore has been engaged by a European company to manage this project. This European company will partner with Vietnamese promoters to coordinate the relationship with the Provincial government in whose jurisdiction a solar plant will reside.
Our first step was to do a financial feasibility study to ensure the project made economic sense. We did this by utilizing our relationship with the Italian company, Denikon, with whom we have had a long-standing partnership. Once we determined the economics were good we further leveraged the relationship with an Italian engineering company, Alpha Tau. The detailed engineering work is necessary for bidding on equipment as well as financing.
Most of the engineering work is done, with one important exception: land analysis. The first step in this analysis is to have a drone fly over the 95-hectare project site to get a sense of how much of that land is usable. After the aerial review, the engineering firm will determine if an on-site visit is necessary. The Vietnamese partners of the project have already negotiated land costs once Natcore determines how much is usable.
We are also beginning to price material, solar panels, inverters, frames, etc. Once again, we are leveraging our relationships and going to the many manufacturers with whom we have had conversations about our technology.
In addition to the turnkey power plant, the Vietnamese are also interested in a 150 MW solar panel manufacturing plant for which Natcore would be the general contractor. We have advised the Vietnamese that we can source a variety of inexpensive solar panels currently, so in order for their facility to make economic sense, it would have to have some type of tariff subsidy in order to compete with manufacturers in other countries, where government subsidies are in force.
We are negotiating an engagement fee, a cost-plus revenue source, and perhaps some type of participation in the power purchase agreement, which defines how much the provincial government would pay for the electricity and for how long. We are the ones that are coordinating the entire project.
We have introduced two banks to the venture that have experience and interest in Vietnam. These banks appear to be anxious to proceed once we obtain the final engineering, power purchase agreement document and negotiated land purchase.
I would like to reinforce that these projects in no way distract us from our primary mission, which is to commercialize our technology making solar energy less costly and more efficient. Our team in Rochester continues to take steps to make that happen. Our Best of Breed program is a program that takes advantage of an opportunity and exploits the recognition our technology has received throughout the industry.
This is a very large and complicated endeavor. Other than Natcore, few companies – if any – have the combination of people, technology and experience to make it work.
If you have any questions or comments, please let us know.
Chuck Provini, President, CEO & Director