REG - Mast Energy Dvlpmts. - Business Update

Mast Energy DevelopmentsAnnouncement

20/08/2024 07:00

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RNS Number : 9790A  Mast Energy Developments PLC  20 August 2024

Mast Energy Developments PLC

(Incorporated in England and Wales)

(Registration Number: 12886458)

LEI :213800HFVHGJ9YGO9F71

Share code on the LSE: MAST

ISIN: GB00BMBSCV12

('MED' or 'the Company')

 

Dated: 20 August 2024

 

Mast Energy Developments PLC ('MED' or 'the Company')

 

Pyebridge 2(nd) Genset Overhaul Commences and Application for Increased CM
Contract

 

Mast Energy Developments PLC is pleased to announce the official commencement
of the 2(nd) genset overhaul, and application for an increased Capacity Market
contract at its Pyebridge flexible power generation asset ("Pyebridge"). The
details of the foregoing are set out below.

 

Pyebridge Key Highlights

 

·    First refurbished genset achieving c. £57k revenue in its first
month of operation paved the way for 2(nd) genset overhaul;

·    Pyebridge signed Engineering Works contract for 2(nd) genset's
overhaul; and

·    2(nd) genset overhaul enables Pyebridge to apply for enhanced
capacity CM contract.

 

Further to the Company's previous announcement dated 7 August 2024, following
the successful completion of the refurbishment of the first of the Pyebridge
site's 3x 2.7MW Jenbacher gensets (thus 8.1MW generation capacity in total),
and the resulting first refurbished genset achieving c. £57k revenue (or c.
£21k per MW month) in its first month of operation (inclusive of initial
ramp-up period), Pyebridge has signed an Engineering Works contract with the
Pyebridge site's O&M contractor, Cooper Östlund regarding the full
long-block overhaul of the 2(nd) genset, and certain further essential
improvements to the site.

 

In addition to the expected enhanced revenue generation via Pyebridge's PPA
with Statkraft, the overhaul of the 2(nd) genset enables, and it is expected
that Pyebridge will apply for its next T-1 CM contract in the upcoming CM
pre-qualification assessment window and subsequent bid auction for the
2025/2026 delivery year, at an enhanced generation capacity, which will result
in increased contractual gross profit margin income received from that
contract.

 

Once the work on the 2(nd) genset has been completed, Pyebridge will have 2x
2.7MW completely refurbished gensets operating and generating at optimum
capacity and performance, which should have a direct positive impact regarding
the site's PPA revenue generation accordingly. The plan remains to overhaul
the then remaining 3(rd) genset in due course, in order to maximise full
reliability, efficiency and revenue generating ability of the Pyebridge site
in the most cost-efficient manner.

 

During the time that the work on the 2(nd) genset will be performed, it is
expected that the site's first refurbished genset will remain operational and
will largely continue to generate revenue via its PPA with Statkraft.
Pyebridge will also keep receiving its current Capacity Market contract income
from the government as previously announced.

 

The total costs for the above referred works on the 2(nd) genset's overhaul
will be funded under the Project Finance agreement with RiverFort (please
refer to previous announcement dated 28 February 2024 for further details of
the Project Finance), with Pyebridge as the borrower. As such, the board of
MED has agreed with RiverFort a 3(rd) Advance against the Project Finance
agreement amounting to a gross total of £1,137,190. The gross draw includes a
VAT funding element, and once the associated VAT has been reclaimed, and an
expected refund for the genset's replaced long-block been received, it will be
paid back to RiverFort (anticipated to be in September), resulting in a net
3(rd) Advance of c. £839,658. The proceeds from the 3(rd) Advance will solely
be used for the above-mentioned works at Pyebridge on the 2(nd) genset's
overhaul. The 3(rd) Advance accelerates the overhaul of the 2(nd) genset, and
once the work is completed will result in additional revenue being generated.

 

The Project Finance with RiverFort, has enabled the successful completion of
the first genset's overhaul, as well the commencement of the 2(nd) genset's
overhaul, and MED is appreciative of RiverFort's ongoing support as its
asset-level strategic funding partner, in order to grow the business.

 

Pieter Krügel, MED CEO, commented: "We are pleased to have officially
initiated the 2(nd) genset's overhaul, following the successful completion of
the 1(st) genset's overhaul and its positive maiden performance results. It is
expected that the completion of the 2(nd) genset's overhaul will not only see
additional enhanced revenue generation via the Pyebridge site's PPA with
Statkraft, but also enable the application for an enhanced CM contract which
will further boost income.

 

"MED's funding partnership with RiverFort has been instrumental in enabling
and fast-tracking the work programme at Pyebridge, which has already resulted
in increased revenue generation sooner than expected. RiverFort's ongoing
support to MED is invaluable and much appreciated.

 

"We are looking forward to updating the market with further progress across
the board in due course."

 

ENDS

 

This announcement contains inside information for the purposes of the UK
version of the Market Abuse Regulation (EU No. 596/2014) as it forms part of
United Kingdom domestic law by virtue of the European Union (Withdrawal) Act
2018 ('UK MAR'). Upon the publication of this announcement, this inside
information is now considered to be in the public domain.

 

For further information please visit www.med.energy (http://www.med.energy/)
or contact:

 Pieter Krügel   Info@med.energy (mailto:Info@med.energy)  Mast Energy        CEO

                                                           Developments PLC
 Jon Belliss     +44 (0)20 7399 9425                       Novum Securities   Corporate Broker

 

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