REG - EQTEC PLC - Mixed feedstock MDC approved by French government

EQTECAnnouncement

08/09/2022 07:00

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RNS Number : 6884Y  EQTEC PLC  08 September 2022

08 September 2022

EQTEC plc

("EQTEC", the "Company" or the "Group")

 

Mixed feedstock Market Development Centre approved by French government

 

EQTEC plc (AIM: EQT), a world-leading technology innovation company enabling
the Net Zero Future through advanced solutions for hydrogen, biofuels, SNG and
other energy production, is pleased to confirm that, further to its
announcement on 20 July 2022, its wholly owned French subsidiary EQTEC France
SAS ("EQTEC France") was, on 7 September 2022, notified of final approval from
France's Ministère de l'économie, des finances et de l'industrie ("MINEFI")
to acquire the 6.5MWe waste-to-energy gasification plant in
Villers-sous-Montrond, France (the "Plant").

 

On this basis, EQTEC France has launched an accelerated construction and
commissioning programme to upgrade the Plant. Once operational, the Plant is
expected to be France's largest ever combined heat and power ("CHP")
gasification project, transforming c. 45,000 tonnes of mixed wood waste and
refuse-derived fuel ("RDF") for export of clean electricity to the national
grid, with the option of increasing its production capacity in future.
Construction is expected to commence in Q1 2023.

 

The Plant will become an EQTEC Market Development Centre ("MDC") for
showcasing EQTEC's technical and commercial capabilities with mixed feedstock,
including a mixture of Grade A waste wood, Grade B waste wood and RDF, and for
catalysing further interest from project funders and owner-operators.

 

David Palumbo, CEO of EQTEC, commented:

"We are excited to add France as our next MDC, alongside Italy and Croatia.
The French market presents a significant and growing pipeline of opportunities
for EQTEC, with potential for a network of licence distributors, contractors
and other partners that support our journey toward becoming a leading
innovator and licensor for Net Zero technology.

 

"At our core, EQTEC is a clean energy technology innovator, and our strategic
focus is to make our leading-edge technology as available as possible to as
many owner-operators as we can around the world. Our MDCs in target
go-to-market geographies are critical to our progress. MDCs are places where
prospective customers and partners can see, hear and touch EQTEC technology in
a live, commercial plant and where owner-operators can witness our highly
scalable solutions and consider how EQTEC can drive their future lines of
business."

 

David Le-Saint, EQTEC Market Lead for France, said:

"The France MDC will be a showcase in France for EQTEC's leading-edge
technology, built on our track record and R&D efforts at our technology
centre at the University of Lorraine. It will boost our visibility with
alliance partners and our credibility with utility groups and institutional
funders.

 

"The acquisition lifts EQTEC into a much better position to pursue project
opportunities in the wake of the energy transition acceleration draft bill due
out before the new session of the French Parliament in October. The draft bill
aims to simplify permitting and set a new framework for the feed-in tariff on
SNG from methanation."

 

Acquisition highlights

·    The Plant, which originally benefitted from c. €35 million of
investment, has been acquired by the Company at a nominal value, as it has
been estimated that further investment of c. €30 million is required to
recommission the plant utilising EQTEC's technology.

·    Expressions of interest for the full funding required, including
Letters of Intent (the "LoIs"), from institutional infrastructure investors
have been received for the project. Construction is expected to commence in Q1
2023.

·    The Plant, once operational, is expected to generate in excess of
€10 million in annual revenues, with further potential to improve the
economics of the Plant.

·    The Plant will process and transform a mixture of c. 45,000 tonnes of
wood waste and RDF sourced and prepared by Bonnefoy Group into 6.5 MWe of
power for export to the national grid.

·    Pursuant to a local court ruling dated 13 July 2022 (the "Ruling"),
the legal transfer was carried out of negotiated contracts and tangible assets
of the previous Project SPV Synnov Déchets SAS ("Synnov") to EQTEC France,
after which EQTEC was able to commence full engineering and design works and
secure all relevant, administrative authorisation and contracts toward
financial close with third-party investors.

·    EQTEC France has received two LoIs from two institutional funders
specialising in similar infrastructure investments; the LoIs express interest
by the potential funders in providing project finance for the Plant, subject
to customary due diligence.

·    The Company has received expressions of interest from two French
energy companies to potentially become owner-operators, once the plant is
successfully commissioned.

·    At financial close, all commercial requirements will have been
addressed, including feedstock supply, long-lease agreement and agreement of a
PPA tariff more favourable than that established previously by Synnov.

·    Following commissioning of the Plant, EQTEC expects to act as the
technology supplier and O&M contractor.

·    Ownership of the project will be established through a new SPV to be
set up in France by EQTEC France SAS.

·    Pursuant to the Ruling and the Approvals, the assets of Synnov will
be transferred to EQTEC France, including the entirety of the existing plant
from the feeding-in system to the grid-connected inverters, along with the
existing environmental permit and associated contracts including for the
feed-in tariff with EDF Obligation d'Achat ("EDF OA"); and

·    Prior to application to the courts for the Ruling, the Company
carried out a preliminary technical audit and legal due diligence toward
acquisition of the Plant from bankruptcy, improvement of the Plant's business
model, adaptation of the technology process and recommissioning of it.

 

Plant history

The Plant was originally developed by Group Bonnefoy ("Bonnefoy") on
Bonnefoy's stone quarry site located at Villers-sous-Montrond, near the
Franco-Swiss border. The gasification plant was designed using non-EQTEC
technologies but was never fully commissioned, as the previous technology did
not successfully complete performance and endurance tests. The previous
project SPV Synnov Déchets SAS entered bankruptcy in November 2021, after
which EQTEC was approached as a potential buyer.

 

This announcement contains inside information as defined in Article 7 of the
EU Market Abuse Regulation No 596/2014, as it forms part of United Kingdom
domestic law by virtue of the European Union (Withdrawal) Act 2018, as
amended, and has been announced in accordance with the Company's obligations
under Article 17 of that Regulation.

 

 EQTEC plc                                           +44 203 883 7009
 David Palumbo / Nauman Babar

 Strand Hanson - Nomad & Financial Adviser           +44 20 7409 3494
 James Harris / Richard Johnson

 Arden Partners - Joint Broker                       +44 20 7614 5900
 Ruari McGirr (Corporate) / Simon Johnson (Sales)

 Canaccord Genuity - Joint Broker                    +44 20 7523 8000
 Henry Fitzgerald-O'Connor / Patrick Dolaghan

 Alma PR - Financial Media & Investor Relations      +44 20 3405 0205
 Josh Royston / Sam Modlin                           EQTEC@almapr.co.uk (mailto:EQTEC@almapr.co.uk)

 Instinctif - General Media Enquiries                +44 (0) 20 7457 2381 / +44 (0) 7887 884794
 Chris Speight / Tim Field                           EQTEC@instinctif.com (mailto:EQTEC@instinctif.com)

 

About EQTEC plc

As one of the world's most experienced gasification technology and engineering
companies, with a growing track record of delivering operational and
commercial success for transforming waste-to-energy through best-in-class
technology innovation, engineering and project development, EQTEC brings
together design innovation, project delivery discipline and solid commercial
experience to add momentum to the global energy transition. EQTEC's proven,
proprietary and patented technology is at the centre of clean energy projects,
sourcing local waste, championing local businesses, creating local jobs and
supporting the transition to localised, decentralised and resilient energy
systems.

 

EQTEC designs, supplies and builds advanced gasification facilities in the UK,
EU and US, with highly efficient equipment that is modular and scalable from
1MW to 30MW. EQTEC's versatile solutions process over 50 varieties of
feedstock, including forestry wood waste, vegetation and other agricultural
waste from farmers, industrial waste and sludge from factories and municipal
waste, all with no hazardous or toxic emissions.

 

EQTEC's solutions produce a pure, high-quality synthesis gas ("syngas") that
can be used for the widest range of applications, including the generation of
electricity and heat, production of synthetic natural gas (through
methanation) or biofuels (through Fischer-Tropsch, gas-to-liquid processing)
and reforming of hydrogen.

 

EQTEC's technology integration capabilities enable the Group to lead
collaborative ecosystems of qualified partners and to build sustainable waste
reduction and green energy infrastructure around the world.

 

The Company is quoted on AIM (ticker: EQT) and the London Stock Exchange has
awarded EQTEC the Green Economy Mark, which recognises listed companies with
50% or more of revenues from environmental/green solutions.

 

Further information on the Company can be found at www.eqtec.com
(http://www.eqtec.com/) .

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