First reserve leads PlascoEnergy equity funding

    OTTAWA, Dec. 3 /CNW Telbec/ - Plasco Energy Group Inc. ("PlascoEnergy" or
the "Company") of Ottawa today announced that First Reserve Corporation
("First Reserve") of Greenwich, Connecticut, the largest U.S.-based private
equity firm that specializes in the energy industry, has led an equity issue
by the Company with the purchase of C$35 million in common shares. This issue
of shares also triggers the exercise of outstanding warrants to purchase
additional common shares for C$14.3 million scheduled to be received on
December 31, 2007. Total proceeds of these issues will be C$54 million.
    "First Reserve is investing C$35 million now and has allocated a further
C$115 million for investment in PlascoEnergy during 2008 to fund the
commercialization and construction of facilities that will be owned and
operated by PlascoEnergy," said Glenn J. Payne, Director of First Reserve.
"Our investment builds on our knowledge of the waste to energy business
developed through prior investments and our continued appetite for
economically attractive renewable energy opportunities. First Reserve has
allocated up to 10 percent of its US$7.8 billion current fund to renewable
    Black River Asset Management, an independently managed subsidiary of
Cargill based in Minnetonka, Minn., and Hera Holdings S.A. of Barcelona,
Spain, will increase their prior investment by purchasing shares in this issue
and by exercise of outstanding warrants. RAB Capital of London, England,
Firebird Management LLC and Galtere International Fund, both of New York,
N.Y., will also increase their prior investments by exercising outstanding
    "This brings to over C$90 million the equity invested in PlascoEnergy
since August 2005. The Company had nominal debt and a modest cash position
prior to this issue, and is well funded for development of commercial
facilities next year," said Rod Bryden, PlascoEnergy President and CEO.
"Commitment of funding from Sustainable Development Technology Canada ("SDTC")
to the Ottawa demonstration project was a key factor in bringing the
PlascoEnergy technology to reality and to attracting private capital that will
fund its future commercial use around the world. SDTC has committed a
non-repayable contribution of C$9.5 million," he said.
    PlascoEnergy has built a waste conversion demonstration facility in
Ottawa based on patented technologies developed and owned by PlascoEnergy. On
September 19, 2006 onsite construction of the facility began. Construction was
completed on June 7, 2007. During the past six months, commissioning of the
plant has tested performance of the system from shredding feedstock to
delivering electricity to Hydro Ottawa, generated by internal combustion
engines operating on Plasco syngas. Converting the City's municipal solid
waste ("MSW") to energy is the final step in the plant's commissioning
process. The plant is designed to convert 100 tonnes per day and permitted to
operate at 85 tonnes per day. Commercial facilities will be comprised of a
number of these units as required for the waste volume to be handled at each
    "Leadership by the City of Ottawa, by providing a site for the plant and
waste to process, together with the cooperation from the Government of
Ontario, including Ministries of the Environment, Energy and Research and
Innovation, have come together to deliver a world-leading system for waste
conversion," Mr. Bryden said.
    Conversion of residual waste remaining after separation of recyclable
material in the City's blue box (plastics) and black box (paper) program will
produce valuable products from more than 99% of household garbage. A tonne of
waste will produce clean synthetic fuel gas, which substitutes for natural
gas, 300 litres of potable quality water, 150 kilograms of clean, inert
granular material to replace sand in production of concrete and small
quantities of industrial salt and fertilizer grade sulphur. There are no air
emissions released from the conversion process.
    The synthetic gas can be used for production of other products, including
ethanol. At the Ottawa demonstration facility the gas is being used to fuel
Jenbacher internal combustion engines to drive electrical generators. Engine
exhausts produce emissions that are significantly better than Ontario
standards, including zero dioxins and furans and non-detectable levels of
    On average, each tonne of waste converted is expected to produce
electricity to power a typical Ottawa household for two months, and reduce
greenhouse gases by more than 2 tonnes.
    "The Plasco Conversion System ("PCS") is a new alternative for capturing
the value in MSW. It is clean and efficient, with plants that can be
attractive additions to the community. The cost to convert waste with the PCS
will generally be less than the cost to bury that waste in a landfill," Rod
Bryden said.

    About PlascoEnergy Group

    Plasco Energy Group Inc. (PlascoEnergy) is an Ottawa-based private
Canadian company. PlascoEnergy and its predecessor RCL Plasma, Inc. have
operated plasma based R&D and test facilities in Ottawa and Spain for more
than a decade. The Plasco Trail Road facility is a full scale semi-commercial
demonstration plant using PlascoEnergy proprietary technologies. This project
has been supported by a contribution from Sustainable Development Technology
Canada, a loan from the Ontario Ministry of Research and Innovation under its
Innovation Demonstration Fund, and the provision at nominal cost of the site
and supply of waste during the demonstration period by the City of Ottawa.

    About SDTC

    SDTC is an arm's-length foundation which has received C$1.05 billion from
the Government of Canada as part of its commitment to create a healthy
environment and a high quality of life for all Canadians.
    SDTC operates two funds aimed at the development and demonstration of
innovative technological solutions. The C$550 million SD Tech Fund(tm)
supports projects that address climate change, air quality, clean water, and
clean soil. The C$500 million NextGen Biofuels Fund(tm) supports the
establishment of first-of-kind large demonstration-scale facilities for the
production of next-generation renewable fuels.
    SDTC operates as a not-for-profit corporation and has been working with
the public and private sector including industry, academia, non-governmental
organizations (NGOs), the financial community and all levels of government to
achieve this mandate.

    About First Reserve

    First Reserve Corporation is the oldest and largest private equity firm
specializing in the energy industry. Founded in 1983, First Reserve was the
first private equity investment firm to actively pursue building a broadly
diversified global investment portfolio of energy companies. Since 1992, First
Reserve has raised over US$12.7 billion for its buyout-focused funds.
Throughout its 24-year history, the strong franchise that the firm has
developed by investing exclusively in the energy industry has served as a
competitive advantage for First Reserve. For more information on First Reserve
Corporation, visit

    /NOTE TO PHOTO EDITORS: A photo accompanying this release is available on
    the CNW Photo Network and archived at
    Additional archived images are also available on the CNW Photo Archive
    website at Images are free to accredited
    members of the media/

For further information:

For further information: Sharilyn Cyr, Executive Assistant to the CEO,
PlascoEnergy Group, (613) 591-9438 ext. 501; Patrice Breton, Director,
Communications, (613) 234-6313 ext. 295; Mark Kollar, Cubitt Jacobs & Prosek,
(212) 279-3115, ext. 201

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