Global Innovative Secures 10-Year BOT Contract to Deliver Street Light Energy Saving Solutions in China
Global Innovative Systems Inc. (OTC BB: GBSY) announced today that its wholly owned subsidiary, Tomi Fuji Energy Management Services Consultants Limited ("TFEMS"), has signed an agreement to deliver street light energy-saving solutions to the City of Linyi, China.
Under the agreement, TFEMS will deliver and install energy-saving equipment, including 156 of its Eco-Pro™ Energy Savers for Streetlight Illumination, to selected areas of Linyi. TFEMS secured the contract upon the successful performance of a demonstration installation which operated for a one-month period on a street in Linyi. Based on the demonstration installation and an energy audit conducted by TFEMS, the rate of energy savings to be generated is estimated by TFEMS at 28.4%. The total annual electricity consumed by the particular segments of the street lighting system expected under the contract is estimated at RMB 11,000,000 (approximately US$1,329,064). As such, the annual energy cost savings to be generated is expected to total approximately RMB 3,124,000 (approximately US$377,454).
The agreement is structured as a 10-year BOT (Build, Operate, Transfer) contract. Under the contract, TFEMS will deliver, install and maintain street light energy saving systems with the assistance of personnel from the municipal government's Linyi Construction Bureau. TFEMS will receive monthly payments from the Financial Bureau of the City of Linyi based on actual energy savings rates generated. TFEMS management expects these payments to total approximately RMB 2,186,800 per year (approximately US$264,218 per year). The payment to TFEMS is based on a shared-savings model, with 70% of the energy cost savings accruing to TFEMS and 30% to the City of Linyi. At the end of the 10-year period, ownership of the energy saving systems will transfer to the City of Linyi.
"We are very pleased to sign this agreement with the City of Linyi, which expands our track record of agreements with government clients in Mainland China," said Bondy Tan, President and Chief Executive Officer of Global Innovative. "We are also pleased with our ability to structure a long-term BOT contract which provides us with a constant stream of recurring revenues expected to total approximately RMB 21,868,000 (or approximately US$2,642,180) over the next 10 years."
Continued Mr. Tan, "It's a win-win situation for both parties. The City of Linyi generates energy cost savings with no capital outlay, while Global Innovative secures a long-term stream of recurring revenues. Global Innovative plans to use this contract as a showpiece to attract other municipalities in Shandong Province and China to our street light energy saving solutions."
Linyi is a booming commercial city of 10 million people located in the southeast coastal region of Shandong Province, China.
About Global Innovative
Global Innovative Systems Inc. (OTC BB: GBSY) delivers total energy management solutions. Since 1999, over 100 commercial, industrial, government and multi-residential clients have benefited from Global Innovative's solutions. From energy audits, to customized design, supply of leading-edge products and technical consultancy, Global Innovative delivers solutions which optimize energy consumption, lower costs and enhance competitiveness for clients. Global Innovative operates through wholly owned subsidiary Tech Team Holdings Limited. Our headquarters are in Hong Kong, and we have offices in Singapore, China, Macau, Canada and the United States.
Safe Harbor Provision
The Private Securities Litigation Reform Act of 1995 provides a "Safe Harbor" for forward-looking statements. This Press Release may contain, in addition to historical information, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are identified by their use of terms and phrases such as "believe," "expect," "plan," "anticipate" and similar expressions identifying forward-looking statements. Investors should not rely on forward-looking statements because they are subject to a variety of risks, uncertainties and other factors that could cause actual results to differ materially from Global Innovative's expectations, and Global Innovative expressly does not undertake any duty to update forward-looking statements. These factors include, but are not limited to, Global Innovative's ability to secure sufficient working capital in order to manufacture and deliver energy saving equipment; its ability to consistently generate energy savings for the client over the prolonged term of the contract; its ability to collect payments receivable from the Financial Bureau of the City of Linyi; and other factors which may cause the actual results, performance or achievements of the Global Innovative to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Information concerning potential factors that could affect Global Innovative is detailed from time to time in the company's reports filed with the Securities and Exchange Commission.
Distributed by Filing Services Canada and retransmitted by Market Wire
Source: Marketwire (April 6, 2005 - 3:00 PM EDT)
News by QuoteMedia
www.quotemedia.com
