EQTEC plc (LON: EQT), the technology solution company for waste gasification to energy projects, today announced that, further to the framework agreement with Phoenix Biomass Energy, Inc. announced on 22 May 2019, it has signed its first agreement regarding the joint development of a biomass gasification power project in California, USA.
The Company has signed a legally binding agreement with Phoenix and North Fork Community Development Council, to acquire 19.99% ownership of North Fork Community Power LLC, a special purpose vehicle formed to build and operate a 2MW biomass project in North Fork, California. The consideration for the Company’s investment will be solely satisfied by the supply of certain items of the existing equipment currently held at EQTEC’s Newry site, valued at US$2.5 million and no cash consideration will be required.
EQTEC also expects to invoice NFCP €2.2 million, under a separate sales contract, for the sale of further equipment and the supply of engineering and design services to NFCP. The sales contract, which will involve a substantial down payment on signing together with further agreed milestone payments until commissioning, is expected be completed and signed by the end of June 2019.
On commissioning the Project is estimated by NFCP to have a valuation of approximately US$20 million and be capable of generating annual revenues of approximately US$4 million.
NFCP holds the lease for the Project’s site as well the relevant permits, power purchase agreement and various other commercial agreements required for the development of the Project. Initial works have already commenced on site and the EPC contractor has been engaged.
Ian Price, Chief Executive Officer of EQTEC, commented:
“We are delighted that our framework agreement with Phoenix is already progressing at speed and creating significant value to all stakeholders. We look forward to signing the sales contract over the coming weeks and visiting the US to explore further opportunities and projects together. This transaction fits with our strategy to have diversified revenue streams and it is a major step for the Company and for all shareholders.”
Gregory Stangl, Chief Executive Officer of Phoenix, commented:
“The technology developed by EQTEC represents a repeatable, scalable solution that could have a big impact on California’s tree mortality crisis and related climate challenges. We are delighted to have a partner who shares a vision for building out a network of distributed biomass generation.”