Biogas Nord Builds First Romania Plant in $8 Million Contract

Biogas Nord AG (BG8), a German company that’s built 350 biogas plants, will construct its first Romanian plant in a 6.6-million euro ($8 million) contract.

The 3-megawatt project, which generates power by burning gas made from organic waste, will be commissioned at the end of 2012 or the beginning of 2013, according to a statement from the Bielefeld, Germany-based company.

Romanian biogas has “huge potential” because of European Union subsidies and the availability of high-quality organic material, Razvan Serachitopol, the company’s manager in the country, said in the statement.

Biogas Nord will retain a 30 percent stake in the plant at Satu Mare in northwest Romania as the company uses shares in projects to balance the seasonal cashflows from construction work, the statement said.

“What we gain is independence from the fluctuations in the market,” spokesman David Miltner said.

Electricity produced will feed into the public grid, while heat will be used in a greenhouse.

The plant, “one of the largest” in Romania according to Serachitopol, is expected to generate an internal rate of return of 30 percent, the company said.

Earlier this month, the builder won its first order in neighboring Ukraine, a waste-to-power project.

To contact the reporter on this story: Josephine Forster in London at jforster13@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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