RECYCLED NEWSPRINT MANUFCTURING FACILITY

BESICORP-EMPIRE NEWSPRINT, LLC

Besicorp-Empire Newsprint, LLC (BENCO) was established to own, build and to operate the Newsprint Facility upon financial close.

Besicorp-Empire Development Company, LLC (BEDCO) has established a Board of Advisors for BENCO who oversaw the development of a detailed operating plan and provide guidance. The board is made up of four retired paper industry senior executives who bring over a combined 120 years of paper industry expertise to the Project.

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FACILITY DESCRIPTION

The Newsprint Project is a recycled newsprint manufacturing facility that will process over 400,000 metric tons per year of old newspaper and magazines to produce 335,000 metric tons per year of 100% recycled, high quality newsprint. The Recycled Newsprint Facility will consist of the following major components:

• A receiving warehouse where old newspapers and magazines will be unloaded from trucks and rail cars and temporarily stored.
• A de-ink area where the old paper are pulped into a watery slurry and washed to remove inks.
• A paper machine where the pulp slurry is made into large rolls of recycled newsprint.
• A finished product warehouse where the newsprint is inventoried and stored before being shipped to customers.
• A water treatment facility to clean the river water before and again after use prior to its return to the river.
• A 115kV electric transmission line directly connected to the National Grid (Niagara Mohawk) system for reduced transmission rates based on the project's location in an Empire Development Zone.

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NEWSPRINT MARKET

The Recycled Newsprint Facility will produce about 10% of the newsprint consumed in the regional market. Multi-year newsprint purchase agreements to purchase the newsprint from the facility are in place from major newspaper publishing firms and the first year of production has been contracted for.

The facility and customers will be serviced through a highly efficient, cost effective truck and rail system. This system, coupled with a modern manufacturing facility, will result in a cost competitive finished product.

FINANCING

HSH Nordbank has been appointed lead debt arranger for financing of Newsprint Project. As such, HSH Nordbank has structured the project debt, and is assembling a group of underwriters and lenders to finance the project. BENCO has also retained a major global financial institution as placement agent for the equity portion of the financing, which is currently underway.

The magnitude and the complexity of the financing of this project require an enormous amount of resources and coordinated efforts from multiple parties.  Key contracts for the construction and operations of facilities are all required by the financing participants which involves multiple banks and private investors. Construction will begin immediately after the financial closure. Due to the depth and complexities involved in this phase of the project development it is not yet possible to announce a specific date for start of construction.  The company will issue a press release as soon as that information becomes available.

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PERMITTING

BEDCO's Recycled Newsprint Facility was developed simultaneously with a power generating facility, on an adjacent site and received permits as described below. In order to consider the combined impacts of both projects most efficiently, it was decided that a joint permit application would be submitted under the Article X process for the power project and the SEQRA process for the Newsprint Project. The projects' Article X Application/Draft Environmental Impact Statement (under the State Environmental Quality Review Act, or "SEQRA," process) is available on this website and provided by BEDCO for public viewing at local public libraries.

SEQRA and Article X
The New York State Department of Environmental Conservation (DEC) and Department of Public Service (DPS) jointly reviewed the permit application under both the DPS's Article X process and the DEC's SEQRA process. The SEQRA approval for the Newsprint Project, including air and water permits, was issued by the DEC Commissioner on September 23, 2004.

Prior to the above certification, a Joint Settlement Agreement was executed by the City of Rensselaer, DEC, DPS, the New York State Department of Health (DOH), the Rensselaer County Environmental Management Council, the Sierra Club, Niagara Mohawk Power Corporation and BEDCO. This document is available on this website and provided by BEDCO for public viewing at local public libraries.

Army Corps of Engineers (ACOE)
The ACOE oversees the review of permits required for the Hudson River intake/discharge structures and site construction activities in the flood plain. Final approval was received from the ACOE in March, 2006.

Local Permitting
The City of Rensselaer has authority for approval of applications for subdivision, site plan approval, variances, and special use, demolition and building permits. Subdivision into three lots was approved on November 22, 2004. Variances were granted on April 25, 2005. Final site plan approval and special use permit approval were granted on June 13, 2005. A demolition permit was granted in December, 2005 and a Flood Plain Development Permit was granted in January, 2006. The building permit will be applied for after financial closure.

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CONSTRUCTION

The construction contract will begin immediately after the financial closure of the project.

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