EQTEC plc (LON:EQT), the technology solution company for waste gasification to energy projects, has today announced the following update on its projects and commercial activities.
· Work for full detailed quote for the grid connection has been completed by grid operator, Northern Powergrid, and the quote has been received and accepted by EQTEC. The requisite assessment and design fees have been paid to Northern Powergrid.
· Non-binding project finance term sheet received for the project, which has been signed by EQTEC and is being assessed by a consortium of potential equity investors. The funding structure set out in the term sheet comprises both senior debt and mezzanine tranches and requires an equity contribution from the consortium of developers of, in aggregate, 10% of the total project CAPEX, currently estimated at c. £170 million.
· Following detailed technical due diligence on EQTEC’s advanced gasification technology, an offer for a Technology Warranty Insurance Policy was offered by an international underwriter of speciality insurance products for the project. The nature of cover offered and the level of insurance premium is considered by EQTEC to be in-line with expectations and it is to be offered to the funders and the EPC contractor as part of the project structure.
United States of America
· Detailed engineering plan completed and delivered by EQTEC, in April 2020, to the EPC contractor and Phoenix as planned and the second payment milestone invoice of €770,000 was received by the Company in May 2020.
· Preparation work commenced in-line with the project programme, including the requirement to have the equipment located at the Group’s Newry site in Ireland being shipped to the US by no later than August 2020.
· Full planning permit for the new location (initially to accommodate a larger 2MWe capacity power plant) is still under process with some delays attributable to COVID-19.
· The client is now evaluating the option of a larger installation and requested a full quote for an increased 3MWe plant. This was completed and provided by EQTEC.
· Full project technical due diligence report completed by TUV Hellas, the nominated engineer of the local Greek bank offering the project finance, which has now been presented to the Bank.
· Project third party financial due diligence requested by the Bank, which was carried out by EY Greece, has also been completed and provided to the Bank.
· The Bank’s credit committee meeting for project final approval was rescheduled to first week of June 2020, due to the Bank prioritising COVID-19 related loans in Greece, with a response expected during June.
ewerGy/ECO Hellas Pipeline:
· 13 potential new projects in the Balkan region have passed the initial due diligence phase and, accordingly, now fall under the scope of the framework agreement (announced on 16 March 2020), including exclusivity.
· 10 new commercial enquiries have been received by the Company in Q1/early Q2 2020 and full detailed commercial offers, with an aggregate potential sales value of c.€120 million, were made by the Company during that period.
· EQTEC has progressed discussions with a European Infrastructure Operator of district heating and waste to energy and, together, the parties have selected three potential projects for financial due diligence, which has already commenced. Once completed, the intention is to develop the projects together under a new framework collaboration agreement.
David Palumbo, CEO of EQTEC, commented:
“I am pleased with the ongoing progress that EQTEC has made during this challenging time. As we approach H2 2020, we continue to focus on executing our strategy with special emphasis in seeking strategic partnerships to enhance our portfolio opportunities. We are already experiencing an increase in the number of large operators that are engaging in conversations with us regarding collaboration opportunities. We believe the coronavirus pandemic may influence the pace and nature of climate action positively and we will be ready to seize inspiring and fruitful new partnerships to apply our solutions.”