REG - Powerhouse Enrgy Grp - Proposed Joint Venture

Powerhouse EnergyAnnouncement

13/07/2022 07:00

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RNS Number : 2985S  Powerhouse Energy Group PLC  13 July 2022

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 13 July 2022

Powerhouse Energy Group Plc

 (the "Company" or "PHE")

 

Proposed Joint Venture with Hydrogen Utopia International Plc for a
non-recyclable

Waste Plastic to Hydrogen facility in the Republic of Ireland

 

Powerhouse Energy Group Plc (AIM: PHE), a company pioneering integrated
technology which converts non-recyclable waste into low carbon energy, is
pleased to announce that it has agreed heads of terms ("HoTs") with Hydrogen
Utopia International Plc (AQSE: HUI) ("HUI") for the proposed joint
development of a site at Lanespark in Co. Tipperary in the Republic of
Ireland. It is anticipated that this would if developed lead to PHE's first
operational full scale waste plastic to hydrogen facility outside of the UK
(the "Lanespark Project").

 

PHE and HUI have agreed, in principle, to establish a joint venture vehicle
owned equally by each company ("JVCo") to which PHE and HUI would contribute
development costs for the Lanespark Project on a 50:50 basis.

 

Under the HoTs, it is anticipated that PHE will pay HUI a non-refundable
payment of £400,000 in cash, and advance to HUI a loan of £600,000, each in
recognition of HUI's contribution to date to the Lanespark Project. It is
anticipated that the Lanespark Project, which encompasses a suitable site in
an EU Just Transition Fund region, would provide potential access to an
investment grade plastic feedstock supplier and the potential to agree offtake
for the facility's anticipated hydrogen and syngas outputs.

 

PHE's participation in JVCo is subject to definitive agreements for the
Lanespark Project being entered into and is also conditional upon the current
lessee and the freeholder of the site agreeing to provide JVCo with a mutually
acceptable ownership interest in the site, which would assist in the ability
for Project Lanespark to be financed (the "Title Condition"). HUI is in
advanced discussions with the relevant parties to seek to satisfy the Title
Condition.

 

It is expected that the loan to be provided to HUI by PHE, will be made
available for drawdown in whole or in part upon satisfaction of the Title
Condition and on entering into the definitive agreements for Project
Lanespark. The loan would have a term of up to two years, with redemption in
full possible after one year through a bullet repayment reflecting rolled up
interest and capital of £660,000 or at the end of the full two year term
through a bullet repayment reflecting rolled up interest and capital of
£750,000. It is also anticipated that HUI will provide PHE with security for
the loan through a charge over its shares in JVCo.

 

In recognition of the fact that the Lanespark Project will supersede any
pre-existing arrangements between HUI and PHE, the parties have agreed that on
entering into the definitive agreements, the existing exclusivity agreement
between PHE and HUI's UK operating subsidiary, as well as the related existing
collaboration agreement, will each be mutually terminated without any further
obligation on either party.

 

As part of its evolving business model, PHE will consider collaborations with
third parties similar to this on future projects. Powerhouse also continues to
support and be the technology provider to Peel NRE Ltd - part of Peel L&P
- and its SPV at Protos Strategic Energy & Resource Park in Cheshire, UK.

 

Keith Riley, Interim Chairman of PHE commented:

"This is an important strategic step forward for Powerhouse Energy. Not only
does it provide a new project for Powerhouse's hydrogen production technology,
it also represents our first major project outside the UK, and the first time
Powerhouse has been party to the special purpose vehicle that will develop and
construct the facility. We will have a seat at the table in the project
decision making, aligning the interests of both HUI and PHE in its success."

 

Paul Drennan-Durose, CEO of PHE, commented:

"Powerhouse Energy must create a quality of choice on projects. In this early
stage of commercialisation there is a need to consider the unusual, and to
have a more flexible business model. The Republic of Ireland is also a good
fit for Powerhouse at this stage in its evolution, its close enough to avoid
an overreach and it is anticipated that the solution will be of great benefit
to local communities, the private sector, and to the state."

 

 

For more information, contact:

 

 Powerhouse Energy Group plc                       powerhouse@tavistock.co.uk (mailto:powerhouse@tavistock.co.uk)

 Paul Drennan-Durose

 WH Ireland Limited (Nominated Adviser)            +44 (0) 207 220 1666

 James Joyce and Megan Liddell

 Turner Pope Investments (TPI) Ltd (Joint Broker)  +44 (0) 203 657 0050

 Andrew Thacker and James Pope

 Tavistock (Financial PR)                          powerhouse@tavistock.co.uk (mailto:powerhouse@tavistock.co.uk)

 Simon Hudson, Nick Elwes and Heather Armstrong

About Powerhouse Energy Group plc

 

Powerhouse Energy has developed a process technology which can utilise waste
plastic, end-of-life-tyres, and other waste streams to convert them
efficiently and economically into syngas from which valuable products such as
chemical precursors, hydrogen, electricity, heat and other industrial products
may be derived.

 

Powerhouse Energy's process produces low levels of safe residues and requires
a small operating footprint, making it suitable for deployment at enterprise
and community level.

 

Powerhouse Energy is quoted on the London Stock Exchange's AIM Market under
the ticker: PHE and is incorporated in the United Kingdom.

 

For more information see www.powerhouseenergy.co.uk
(http://www.powerhouseenergy.co.uk)

 

About Hydrogen Utopia

 

Hydrogen Utopia aims to become one of the leading new European companies
specialising in turning non-recyclable mixed waste plastic into carbon-free
fuels, new materials or distributed renewable heat.

An HUI facility uses non-recyclable mixed waste plastic as feedstock and turns
it into syngas from which new products and energy can be produced. HUI
anticipates that its revenues will be derived from a variety of sources,
dependent upon location and configuration of the HUI facilities, including the
sale of syngas, hydrogen and other gases, electricity and heat sales, and the
payment to it of fees for a given quantity of non-recyclable mixed waste
plastic received at an HUI facility.

HUI will target areas where there is significant private sector interest or
potential, financial backing is accessible and or where substantial EU and/or
government funded sources of grants and loans are or may be available. The
global increase in fossil fuel-based energy prices reinforces the need for
alternative, price competitive energy sources, which HUI's business model can
provide.

The pressing need to deal with growing amounts of waste plastic combined with
a real momentum in the use of hydrogen from renewable sources may pave the way
for a rapid deployment of and investment in HUI facilities.

 

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