EQTEC plc (LON: EQT), the technology solution company for waste gasification to energy projects, has announced that, via its wholly owned subsidiary, EQTEC Iberia SLU, it has entered into an agreement for the development of a proposed 1.18 MW net biomass gasification power plant project in Gratens, France.
The Agreement entered into is between Iberia, Biomasse 31, which is the existing Project SPV, and the Barthe family, owners of Biomasse 31.
Pursuant to the Agreement, the Parties will work towards definitive legal documents pursuant to which the Parties and the funders introduced by each party will, inter alia, invest in the SPV in order to achieve financial close of the Project. The nature and quantum of such investment, and the share of such funding between the Parties, is yet to be determined. It is intended that EQTEC will have the option, but not the obligation, to invest equity capital into the SPV.
Key provisions of the Agreement
The Agreement reflects the key terms required to enable the completion of the necessary project engineering, project management and project documentation needed for final legal documentation relating to the Project, which includes the following:
· The Project is proposed to comprise a 1.18 MW net integrated biomass gasification power plant in Gratens, France;
· EQTEC to provide its gasification technology for the Project with a fixed cost EPC solution;
· Iberia will act as project manager and provide technology, equipment and services, including development services. The Company estimates that the value of its proposed technology, equipment and services contract would be c.€5.5 million and a full detailed commercial offer, on this basis, has been prepared for the Project;
· Iberia to incur costs of up to €100,000 before financial close for the provision of the engineering services required to obtain the requisite permitting to reach financial close, which is proposed to be repaid to Iberia on financial close at a 2x multiple;
· Biomasse 31 to be responsible for all Project permitting and licensing. Application for certain licences and permits need to be finalised before construction can commence; and
· Iberia has exclusivity to develop the Project up to 31 December 2020, which the Parties consider to be the expected long stop deadline necessary to obtain all the required permits to achieve financial close and commence construction. The Parties can mutually agree to extend the exclusivity period.
The Parties are progressing the requisite workstreams required to enter into final legal documentation and further announcements will be made in due course. Representatives of the Company have met with potential third-party funders for the Project and a number of pre-planning meetings have been carried out with the relevant authorities, with a number confirming in writing their support for the Project.
David Palumbo, CEO of EQTEC, commented:
“It is very encouraging to sign our first agreement for a commercial project in France, with a partner so embedded in the local community and so committed to developing energy transition infrastructure throughout the country. We have been in discussions with the Barthe family since the beginning of the year and we are delighted that the they have been strong advocates of our technology. In our view, France has always been a market where innovation and creative solutions in clean energy are given full support both from the public and private sectors. Our technology has been positively reviewed by French entities, such as the National Alliance for Coordination of Research for Energy (ANCRE), and has obtained endorsements from the team of academics running the Research Pilot Plant built by EQTEC in Lorraine University. We strongly believe that our potential market in France is only starting to open up and the Project, combined with our presence at Lorraine, can act as the foundation for growth and development in the region.”
Mr Pierre-Olivier Barthe, CEO of Biomass 31, commented:
“We are very excited to have entered into this agreement with EQTEC for the development of this project, which is so important for us and the local community. We have been working on this for a number of years without being able to find a reliable and professional technology partner until now. The depth of technical understanding and capabilities of EQTEC’s technical team is, in our view, unmatched in the sector as per the excellent references that were given to us. Now having experienced working with them, we have no doubt that we will make a success out of this project, which we believe is the first of its type in France.”