ZooShare reaches $2.2 million for biogas project at Toronto Zoo
ZooShare Biogas Cooperative Inc. recently announced that it reached another milestone on its journey to implement a biogas plant at the Toronto Zoo by raising $2.2 million in community bonds, just before its goal to close bond sales on March 31. Around 300 people invested in the proposed 500-kW biogas plant, which will generate power for the Ontario grid from 3,000 tons of zoo poo and 14,000 tons of local grocery waste from a large Canadian grocery chain.
This milestone signifies the target has been reached in community bond funding, but the company is now seeking approximately $2.6 million in construction financing and $1.2 million in long-term debt, including interest during construction, reserve accounts—principal and interest, unscheduled maintenance—and working capital. In total, the capital required at the project’s commercial operation date is $6 million.
Last October, Biomass Magazine reported ZooShare hit $1 million in financing for the project from 150 investors purchasing bonds. Since then, the project has more than doubled in investors and bond sales. “We’re very excited to be raising money in this way, and to be engaging directly with the individuals from around Ontario,” said Daniel Bida, executive director of ZooShare. “It’s a huge vote of confidence for us, we had over 300 people who wanted to invest their savings in our project. It was really a great demonstration that the market is hungry for these types of investments.”
Bonds were sold for the past 18 months, and Bida said ZooShare achieved that through a combination of grass-roots type selling, social media, traditional media, but mostly just word of mouth. Results from a member survey indicated that word of mouth was the number one source of bond sales. “Certainly our members who came in early were integral to reaching this goal,” Bida said.
Investors not only receive 7 percent annual return for seven years, but they can also feel good about making a positive environmental impact. “They all benefit in the larger way by feeling that they are contributing to a solution, and making a local impact with their investment dollars,” Bida said. The first interest payment for bond holders will be January 2017.
ZooShare expects to generate revenues of $1.3 million annually from waste. The company received a feed-in-tariff (FIT) contract with the Ontario Power Authority in July of 2013, due to the creation of the Green Energy Act in Ontario. Under the program, a premium fixed rate of 17 cents per kWh will be paid to ZooShare—as the renewable energy producer—under a 20-year contract. Other sources of revenue include payments from the grocery chain to take and process its organic waste for the next 10 years—with a 10-year renewable option. Also, ZooShare will sell the fertilizer by-product of the complete-mix wet anaerobic digestion (AD) process.
Right now, ZooShare is focused on completing the approval process. Bida said the company anticipates they’ll get the required environmental permits by May. This is also around the time ZooShare anticipates selecting a technology provider. Currently, the company has a short list of three to four companies with experience in the Canadian biogas market Bida said.
After the permits are acquired, ZooShare will focus on securing funds and ground break. According to Bida, ZooShare has been in negotiations with commercial lenders for the last six months, and the company looks forward to securing those funds and beginning construction of the facility likely in September—contingent upon receiving the environmental permit. The company is working with AngusPower as its engineering, construction and procurement (EPC) firm.
Approximately six to nine months are needed for the construction commissioning process, and since the project’s construction will likely fall over the winter, Bida estimates commercial operations could be possible in May of 2016 if construction begins this September.
Once operational, the biogas plant will also serve as another spectacle to tourists’ visits to the Toronto Zoo, as they plan to add an education component to the project by implementing a classroom area and an opportunity for a tour. “We are trying to educate and be a catalyst for the growth of biogas, and we feel strongly that this is best accomplished when people can tour the biogas site and get an up-close and personal look at how all of this works,” Bida said.