The Central Energy Plant Project (the “Project”) developed by Mensilin Holdings Sdn. Bhd. (the “Project Developer” or Mensilin) is a biomass cogeneration steam project located in the Pasir Gudang Industrial Estate, Johor, Malaysia (the Host Country) that will supply steam to users within the industrial estate. The steam plant will generate 31 tonnes of steam per hour when fully operational, with a working pressure of 25 Barg. (Gauge Pressure) The project will supply high quality steam to clients in the industrial estate, reducing carbon dioxide emissions by offsetting fossil fuel-fired steam generation. In the absence of the project the steam would be produced at the industrial users’ sites, using natural gas.

The Project Developer has secured a contract for the purchase of organic materials of plant origin that are suitable as fuel which otherwise would be dumped in the landfill. The minimum quantity that has been secured is 7,500 tonnes a month (or 90,000 tonnes per year). The project developer has also secured two contracts with steam buyers to sell 22 tonnes/hr of steam. The project developer is currently under negotiations to secure the sell for the rest of the steam production. The remaining steam will be use to generate electricity for internal use.

The different types of organic materials that will be combusted and monitored for steam generation in the biomass plant are the followings:

• Bark
• Waste Furniture
• Fuel Wood (this type is waste wood that the biomass plant consider as “fuel wood”)
• Waste Wood Pallets
• Coffee Waste

All types of biomass are currently being dumped in the Tanjung langsat landfill located in Pasir Gudang where there is no open burning. Instead of dumping them in the landfill, they will be transported to Mensilin’s site so the plant will be using fresh waste. Those biomass residues can be therefore considered as the non-fossil fraction of an industrial waste and then can be classified as renewable. Also, since the landfill and Mensilin site are close, there is no need to consider wood transportation emissions.

The project will claim emissions reductions through (1) the displacement of more carbon intensive gas generated process steam, and (2) avoidance of methane production from biomass decay through controlled combustion. The project is estimated to reduce approximately 48,070 tonnes of CO2e the first year.

By utilising biomass to displace fossil fuel in energy generation, the Project will contribute to the development of Malaysia’s renewable energy sources. The controlled combustion of biomass in the plant’s boiler offers a more environmentally sound means of disposal of biomass waste residues. In CDM – Executive Board

addition, the use of domestically available biomass as an energy resource helps conserve foreign exchange by reducing the reliance on imported fossil fuels to meet the country’s expanding energy requirements.

Other expected benefits from the project include: The multiplier effect of this investment is likely to bring additional benefits such as increased employment opportunities in the area where the project is located. 23 new positions will be created for the operation of the plant (20 working in the plant and 3 in the offices located in the site); It increases the diversity and security of energy supply; It contributes towards a decrease in fossil fuel consumption; The project will act as a clean technology demonstration project, encouraging development of biomass energy generation facilities throughout Malaysia which could be replicated across the region; It contributes towards meeting the Government’s fifth fuel policy renewable energy targets of 5% of power output in Malaysia to be from renewable sources.