TIDMEQT
RNS Number : 9317T
EQTEC PLC
23 July 2020
23 July 2020
EQTEC plc
("EQTEC", the "Company" or the "Group")
Exclusivity Agreement for RDF Deeside Project
EQTEC plc (AIM: EQT), the technology solution company for waste
gasification to energy projects, is pleased to announce that it has
signed an Exclusivity Agreement (the "Agreement") with Logik
Developments Limited ("Logik"), in respect of the Deeside Refuse
Derived Fuel ("RDF") project.
Deeside RDF Project
Further to signing a Memorandum of Understanding ("MOU") with
Logik, the owner of 6.27ha of land at the Deeside Industrial
Estate, Flintshire, Wales, which currently has planning permission
for a waste management facility comprising the recycling of waste,
the production of RDF and an anaerobic digestion facility (the
"Project"), and completing initial due diligence, the Company
entered into an exclusivity agreement on 23 July 2020 pursuant to
which Logik has granted the Company exclusivity to enter into a
potential transaction wherby EQTEC can obtain full ownership of the
Project from Logik via acquisition of the Project SPV.
In consideration for the granting of exclusivity, EQTEC has paid
Logik GBP100,000, which would be deducted from the final purchase
price for the Project. The exclusivity runs until March 2021 and
can be extended by mutual agreement. The proposed purchase price
for the Project will be GBP4.6 million plus a further amount to be
calculated based on a formula linked to the final planning achieved
and a detailed financial model of the Project (subject to a maximum
further amount of GBP5.4 million). Any such transaction, inter
alia, will be subject to definitive agreements, further due
diligence and and funding. Under the MOU, EQTEC will act as lead
developer for the Project, having responsiblity for, inter alia,
introducing potential project investors and EPC and O&M
partners.
The existing planning permission on the Project provides for the
construction and operation of a waste management facility for
municipal, commercial and industrial waste for 182,000 tonnes of
annual residual waste, and an anaerobic digestion plant which is
projected to produce 2MW of biogas. Under the current planning,
60-70% of the RDF produced at the proposed waste management
facility would incur disposal and/or landfill costs .
Under the Agreement, EQTEC will now seek additional planning
permission such that its advanced gasification technology can be
applied to the Project, which would reduce the environmental impact
of the Project whilst, also improving its economics. The Company
has been in discussions with the local authority, which, in EQTEC's
view, has been supportive and is keen to have such infrastructure
as an alternative to incineration technologies. With the addition
of the EQTEC technology, the plant would be capable of converting
hundreds of thousands of tonnes per year of non-recyclable everyday
household and commercial waste, otherwise destined for landfill or
incineration, into green energy.
Subject to achieving the additional planning, the Company
estimates that, with the application of its advanced gasification
technology, the Project would be capable of generating 20MW of
green electricity, enough to power 37,500 homes, and 27MW of
thermal heat production. The electricity and heat could be exported
to the grid and/or sold locally. The Company's preference would be
to create private wire and heat networks using the surplus
electricity and heat, as it is already aware of interest from a
large industrial energy user in the area.
Subject to obtaining the additional planning permission, and
concluding the acquisition as planned, EQTEC estimates that the
additional capacity for the thermal conversion of waste, utilising
the Group's advance gasification technology, would generate
additional revenues for the Project SPV of c.GBP16 million in gate
fees, c.GBP6 million in electricity sales and up to GBP1.5 million
in heat sales.
EQTEC believes that the proposed plant, if constructed with the
addition of EQTEC's advanced gasification technology, would
significantly lower the environmental impact of large local
industrial users, whilst potentially enabling these industrial
users to make significant cost savings on their energy.
David Palumbo, CEO of EQTEC, commented:
"This significant RDF project in the UK highlights the
increasing demand for EQTEC's proven, proprietary and patented
advanced gasification technology and solutions, which can
significantly improve both the environmental impact and the
economics of many traditional waste to energy facilities, whilst
potentially delivering attractive returns to EQTEC and our
shareholders.
"The Project has the potential to provide communities and
companies with a credible and commercially attractive alternative
to landfill and incineration for residual municipal and commercial
waste with much less of an environmental impact. We look forward to
providing further updates to shareholders in due course."
Neil Spencer, Director of LOGIK, commented:
"Logik achieved planning on the site over a year ago and we have
been looking for a partner who could deliver and operate a waste to
energy facility to our high standards and bring employment and
expertise to the local area. EQTEC's advance gasification
technology has the potential to significantly improve the
environmental and economic impacts of this project for the benefit
of the local community and large industrial energy users alike.
Together with EQTEC, we look forward to continuing to work closely
with all local stakeholders to help ensure this project secures
additional planning and gets built."
This announcement contains inside information as defined in
Article 7 of the EU Market Abuse Regulation No 596/2014 and has
been announced in accordance with the Company's obligations under
Article 17 of that Regulation.
ENQUIRIES
EQTEC plc +353 21 2409 056
David Palumbo / Gerry Madden
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Strand Hanson - Nomad & Financial Adviser +44 20 7409 3494
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James Harris / James Dance / Jack Botros
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Arden Partners - Broker +44 20 7614 5900
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Paul Shackleton (Corporate) / Fraser Marshall
(Sales)
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Maitland/AMO - Strategic Communications Advisor +44 20 7379 5151
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James Benjamin
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IFC Advisory - Financial PR & IR +44 20 3934 6630
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Tim Metcalfe / Graham Herring / Zach Cohen
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About EQTEC plc
EQTEC is a technology partner with proven proprietary patented
technology for waste-to-value applications.
EQTEC designs and supplies advanced gasification solutions that
have a higher efficiency product offering and are modular and
scalable from 2MW to 30MW. Of particular importance is the
versatility of our solutions to process over 50 different types of
feedstock, including municipal waste, agricultural waste, biomass
and plastics. Our solutions produce a uniquely pure high-quality
synthesis gas (syngas), that is capable of being used for the
widest applications in energy and biofuels.
Proprietary technology design together with deployment and
maintenance capabilities mitigate the risks when using third party
equipment. Our Technology Integration capabilities enable us to
lead collaborative ecosystems that build sustainable, waste
elimination and green energy infrastructure.
The Company is quoted on AIM, bears the Green Economy Mark
awarded by the London Stock Exchange and trades as EQT. Further
information on the Company can be found at www.eqtec.com
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END
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