Cielo Waste Solutions Corp. has struck a tentative deal to obtain funds for the construction of a commercial-scale renewable diesel refinery.
The Surrey, B.C. company (CSE:CMC), which has its operational headquarters in Red Deer, said that it’s entered into a memorandum of understanding with a private investor for up to $10 million in financing for a 700-litre-per-hour waste-to-diesel refinery. Cielo currently has a 50-litre-per-hour demonstration refinery just outside Red Deer, but wants to manufacture larger commercial-scale facilities for sale to buyers around the world.
It also plans to set up multiple refineries at the Horn Hill waste transfer station east of Penhold.
Cielo’s technology converts municipal waste like paper, cardboard, cloth and plastic into diesel fuel.
The company said that its investor, who was not identified, has the right of first refusal to provide additional funding of up to $1 billion for 100 more refineries.
The investor will receive a 50 per cent interest in the resulting intellectual property, 90 per cent of the net revenues from the first refinery until the funding is repaid, and a 70 per cent ownership in the new refinery thereafter.
Cielo will also pay $500,000 to the investor for every refinery it sells, and the investor will receive a two cent royalty from all of the refineries.
“We now have secured an excellent strategic partner who understands the massive potential of our technology and the worldwide market we are looking to capture,” said Don Allan, president of Cielo.
“This financing provides Cielo with the opportunity to become a major renewable diesel producer using abundant municipal solid wastes from landfills and waste transfer sites throughout Canada.”
Cielo has also announced that it has entered into an agreement with New Fuel International Inc. of Seattle, Wash., for New Fuel to market and produce renewable biofuel from industrial biomass waste streams in California, Oregon, Washington, Hawaii, Alaska, British Columbia and Ontario.
“We are eager to start working with Cielo,” said Jerauld Bessette, New Fuel’s chief marketing officer. “We have spent years reviewing technologies around the world, and we believe Cielo has developed an industry-changing technology that will help Washington State and other jurisdictions become carbon natural through the production of low-carbon, high-grade renewable diesel fuel.”
In May, Cielo announced an agreement with Emerald Green Energy Pty Ltd. of Perth, Australian, for Emerald to sell Cielo products in Australia.