FUTECH

Biofuels Division

Business Plan Executive

Summary
Futech Peru SAC (Futech), in Oxapampa, Pto. Bermudez, Peru

Futech.pe
“An Integrated Upstream Bio-Feedstock &
Downstream BioEnergy Production Company”

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Section A: Company:
Parent company is Futech Peru SAC. (Futech), a private Lima Peru, Peruvian Enterprise. To develop its
biofuel project in Peru, Futech operates through a division company, Futech Biofuels.

Section B: Project Description

Brief Description of the Project:

Futech Biofuels, are developing an integrated renewable energy company combining: 1) “upstream”
Jatropha feedstock cultivation operations and 2) “downstream” biodiesel and related byproduct
refining and supply operations.

The integration and combination of “upstream” and “downstream” operations is the most significant
advantage and differentiator of Futech Biofuels business model versus many other biofuel companies
now currently operating in a challenging environment. In the last two-three years many biodiesel
ventures developed downstream refining operations exclusively, totally dependent on securing
feedstock on the open market and subject to extreme price volatility that could not be absorbed. This
is Futech Biofuels simple yet crucial business advantage and differentiator: 1) secure a productive,
long-term agro-land base, 2) cultivate and deliver an adequate supply of feedstock on a cost-
effective and predictable basis as an internal business operation, and 3) refine and value-add
multiple highvalue products.

The project will combine:

 Cultivation of Jatropha on 10,000 HA of vacant, un-utilized land in Oxapampa Province, District

Pto. Bermudez in Jungle Peru. This land base can produce approximately 69,270 Tonnes of
Jatropha seeds annually;
 Refining Operations including: Jatropha seed crushing and refining of Crude Jatropha Oil (CJO)
into approximately 23 Million Liters/Yr of EU/US standard biodiesel and byproducts of Presscake
and Glycerine. Presscake can be utilized for fertilizer, animal feed, or biomass energy for process
steam and power. Glycerin is utilized in production of cosmetics and pharmaceuticals as well as a
high heating value fuel;
 After full development, the project is projected to generate over $30 Million/Yr in annual turnover
with EBITDA of over $15 Million/Yr;
 Carbon Credit opportunities have been identified but require deeper analysis prior to developing
an approach for application within the UN’s CDM process. A well-qualified carbon asset
development and finance group has indicated interest in the project and has provided initial
carbon credit analysis that is encouraging – approximately 52,000 CO2 T/Yr just from producing
electrical power from Jatropha residues;
 CCNN Selva de Oro, has given Futech Biofuels approval for funding associated with its Jatropha
plantation development activities in Pto. Bermudez.

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Location:
The project operating area is Oxapampa Province, Puerto Bermudez District in Jungle Peru,
approximately 115 kms north, connected by good roads, to the capital city of Lima. The climate and
landscape is favorable to Jatropha growth: ideal precipitation of 1200mm to 1500mm per year,
average temperatures well above 25 C and level terrain with well-drained soils.

Perú

Puerto
Bermúdez

Business Drivers and Value-Adds for Host-Nation:

The project offers multiple value-adds and win-win opportunities for Peru that create a very
positive environment for successful project development:

Peruvian Government Support

All levels of government in Peru, including the relevant federal ministries (Commerce, Industry, Energy
& Agriculture), the provincial governor’s office and line-agencies have offered their full and complete
support for the project. The Peruvians authorities are extremely eager to attract agro-industrial
projects that take advantage of Peru competitive advantages of availability of 1) vacant, unutilized
lands, 2) favorable growing climate, and 3) adequate, cost-effective labor. Projects that maximize
benefits to Peru from the standpoint of economic, employment, energy and environment benefits are
favored and promoted. This project qualifies as an investment project under the Chamber of
Commerce of Lima (CCL). It is also worth noting that Peru national currency, the Sol, is freely
exchanged with and linked to the US Dollar mitigating any foreign exchange risk.

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Energy Independence
Peru currently imports ALL of its refined liquid fuel products and much of its electrical power. It is a
national priority to establish some measure of energy independence and develop domestic sources of
energy, the cost and availability of which are serious limitations on sustaining the nation’s economic
growth and in attracting much needed foreign direct investment. Energy from biomass utilizes some
of Peru competitive advantages (as noted above) that drive the domestic economy and delivers
critical products without further expenditure of foreign reserves.

Economic Development
Futech Biofuels project will be one of Peru most substantial undertaken to date and will focus on one
of the Government’s high priority sectors for attracting sustainable development and foreign
investment: agro-industrial business. The host province, Oxapampa, requires substantial investment
to provide better income opportunities for its population and to develop its overall economy. Vacant,
un-utilized lands must be converted to productive operations to expand the local and provincial
economies. The project’s reach will extend further to the ultimate site of refining operations and
throughout the transportation system. A total investment of $45 Million will easily drive a multiplier of
2.0 and likely well beyond.

Employment Development
Agro-operations in Pto. Bermudez, at full production of 10,000 HA’s will generate approximately
2,700 plantation jobs where none existed before. In addition to the local population the project will
draw labor from surrounding provinces and their plantation operations (such as rubber). A project of
this nature will also assist in the mitigation of excessive in-migration to Lima city and it’s growing
garment sector and other manufacturing industries. CCNN people from out-lying provinces generally
prefer to live in their “home” territory but have been forced into the larger cities seeking employment
and income opportunities. Outmigration from Lima is another Government priority that seeks to
alleviate growth pressures and congestion in Lima. The Government has indicated the full support of
its labor administration to ensure Peru labor resources are directed to the project to ensure its
success. Opportunities to develop highly-skilled home-grown agronomists with practical experience
and technical knowledge will be enhanced, and provide an ongoing legacy for Peru agro-sector.

Two further points to note - the cultivation of Jatropha is well-suited to any skill level and women will
have considerable opportunities within the operation. Further Futech Biofuels has had many
expressions of interest from other agricultural land-holders and NGO’s operating in Peru, interested in
growing Jatropha and supplying seeds to the crushing and refining facility. This additional “external
supply” has been estimated by an NGO as a potential and additional 20% of seed supply on top of
the “internal supply” at full production volume of 69,270 T/Yr. Once ground is broken at the seed
crushing and refining complex we can expect strong interest from additional seed grower-suppliers
that will complement our feedstock availability.

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Environmental Improvements
A project of this nature will reduce “greenhouse gases” (GHG’s) and CO2 emissions in three ways:

 Absorption and sequestering of CO2 in the new Jatropha trees planted (8 kg/tree/yr);
 Replacement of liquid fossil-fuel products with liquid biofuel products;
 Generation of biomass power vs. petro-diesel generated power.

Peru is a signatory to the Kyoto Accord and actively seeks and promotes the creation of projects and
initiatives that can successfully apply for carbon credits under the “Clean Development Mechanism”
(CDM).

New Product Development Policy and Distribution/ Offtake

The Peruvian Government has kept a close eye on the highly successful biofuel mandate policy in
neighboring Colombia and is considering a similar program. The adoption of such a usage mandate is
challenging in Peru until sufficient biofuel products are produced domestically. Futech Biofuels
intends to lead and drive the initiative by becoming Peru leading bioenergy product producer.

Additionally the company has been encouraged by various discussions with several liquid fuel
distributors in Peru including HEAVEN Petroleum, PETROPERU, which have all indicated interest to
offtake refined B100 and in developing and distributing new blended products (B2, B5, B10, B20
etc.) through their wholesale and retail channels. JatrophaBioJet, a new entity trading biodiesel
targeted for the aviation fuel market has indicated interest to execute an offtake agreement at any
time.

Several other offtake opportunities exist for the company in Peru. They are:

 Heaven Petroleum has indicated interest in securing offtake for it’s members’ factory diesel
power generators, a potential market of 100 M L/Yr on its own;
 Independent Power Producers running diesel-generators are numerous in the off-grid, rural areas
of Peru. Several have indicated interest in securing offtake when available;
 Peru own domestic biofuel and biopower markets will likely be home to ALL of Futech Biofuels
products. Should Futech Biofuels need to seek opportunities for offtake outside Peru,
neighboring Colombia and Mexico are eager markets that will demand 30 Billion L/Yr in diesel
fuel by 2016;
 Ministry of Energy and Mines (MINEM), the national power authority, has indicated a willingness
to discuss power offtake opportunities with Futech Biofuels once a biomass power component
has been proposed and has been feasibility engineered.

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The Status of Land Holdings:
The company has done has made agreements with the Forest NPP de Oro, located in the province of
Oxapampa, District of Puerto Bermudez, taking the award of his property for 50 years, they totaling
10,000 HA.

Political Risk Insurance:

Peru fully qualifies for the World Bank’s “MIGA” political risk insurance and guarantee programs and
is a signatory to a bi-lateral agreement with the US’s OPIC allowing for similar covers applicable to US
companies doing business in Peru, or their investors or lenders. These covers can be obtained for
risks including: business expropriation and nationalization, Government price setting or other
interference, political instability, social unrest, war, rebellion etc.

Industry Experience:
Futech Biofuels team in Peru has previously developed a 10,000 HA Jatropha plantation for another
company. Futech Biofuels has also engaged Jatropha Curcas Plantations as chief plantation
specialist and advisor. The firm has been involved in developing large agro-plantations in north Peru,
including palm plantations, for over 10 years and operates a state-of-art Jatropha nursery and
propagation facility in Peru. Futech Biofuels has determined that seed strains developed in Peru
develop the best yielding Jatropha trees for the similar jungle Peru landscape, climate, and
environment.

The Jatropha Seed Crushing & Biodiesel Refining Technology:

The Jatropha seed crushing and expelling technology and equipment to extract Crude Jatropha Oil
(CJO) from Jatropha seeds, will be provided by Desmet Ballestra. See:
http://www.desmetballestraoleo.com and
http://www.desmetballestrarosedowns.com/SterlingSeriesPre-Presses.html (Desmet’s expelling
specialist sister company) for a list of projects developed all over the globe.

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A Desmet Jatropha Seed Press

The biodiesel refining technology and processing equipment, utilizing the proven, state of the art
“transestrification” process will be provided by Acqua International (Australia) and its US subsidiary,
SAFER Energy. These two companies have developed projects for GM, BP, the US Navy, and Shell.
See: http://www.acquagroup.com/index.htm and http://www.saferenergy.net/ . Recent biodiesel
refinery projects include: Safe Fuels - Houston, Texas, USA and Delta Fuels - West Helena, Arkansas,
USA. SAFER has been fully vetted and approved by GE Finance as a technology and equipment
provider.

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SAFER Energy’s Client’s Biodiesel Refinery under construction in West Helena, Arkansas, USA

Management & Key Personnel:

 Mr. Antonio Castro, General Manager & Founder
Mr. Castro, Senior Professional in Information Technology, Airport Consultant, Manager and
Expert Training Centers Business Intelligence in the Peruvian Corporation of Airports and
Commercial Aviation Training Centre of Civil Aviation CORPAC, Avianca of Colombia, Bolivia
DGAC DHL Aero Express and Panama and expertise is in renewable and alternative energy,
including electric vehicles, fuel cells, “run of river” hydro and bioenergy projects. Antonio leads
the company as it develops and executes it strategic agro-industrial business plan.
 Mr. Pablo Flores, Accounting Manager & Founder
Mr. Flores is a Futech founder with extensive Peru and large multi-faceted industrial project
management experience including development of a $500M pulp mill with adjoining 3 Million HA
woodlands operation. Pablo oversees company operations throughout All Peru and has extensive
business relationships.
 Mr. Oscar Rodriguez, Director - Business Development
Mr. Rodriguez have 15 years of valuable experience in project management and startups in the
Peru region. He has been instrumental in developing several major projects and most recently has
been responsible for growing the business of a global logistics leader in Peru.

 Ronal Villanueva Davila, Executive Regional Manager – Engineering & Technical Development
Mr. Villanueva has over 35 years of Industrial Engineer with extensive experience in the areas of
Airport Planning, Airport Environment in the Peruvian Corporation of Airports and Commercial
Aviation, Peruvian Steamship Company, National University Federico Villarreal (Peru).

Section C: Financing Structure

As will be fully outlined and refined in our financial model (once all parameters of the debt instrument
are known), the total cost of the project over the next five years is estimated to be approximately $30
Million. These costs can be broken down either by the phases of development or by category of cost. It
is the intention that any debt will be secured by the land as well as plant and equipment. Further, at
full production the project will generate over $60 Million and annual revenue and over $30 Million in
EBITDA.

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A. Phases of Development:

Phase I: Proof of Concept/Land Deposits $5 Million

(Completed Q4 2019)

Phase II: Balance of Contracted Land Development $20 Million

(Q3 2019 to Q3 2020)

Phase III: Construction of Expelling, Refining Facility $15 Million

(Q3 2019 to Q3 2020)

Contingency $5 Million

Total: $45 Million

B. Category of Cost:

1. Land Lease of 10,000 HA $5 Million

2. Clearing and Planting of Land $20 Million

3. Expelling and Refining Facilities $15 Million

4. Contingency $5 Million

Total: $45 Million

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