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EQTEC PLC - Exclusivity Agreement for RDF Deeside Project

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 £100,000, 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 £4.6 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 £5.4 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.£16 million in gate fees, c.£6 million in electricity sales and up to £1.5 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




Strand Hanson - Nomad & Financial Adviser

+44 20 7409 3494

James Harris / James Dance / Jack Botros




Arden Partners - Broker

+44 20 7614 5900

Paul Shackleton (Corporate) / Fraser Marshall (Sales)




Maitland/AMO - Strategic Communications Advisor

+44 20 7379 5151

James Benjamin




IFC Advisory - Financial PR & IR

+44 20 3934 6630

Tim Metcalfe / Graham Herring / Zach Cohen


 

 

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

 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.
 
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