TIDMEQT
RNS Number : 6952C
EQTEC PLC
12 October 2022
12 October 2022
EQTEC plc
("EQTEC", the "Company" or the "Group")
North Fork project finance restructuring toward full funding
EQTEC plc (AIM: EQT), a global technology innovator powering
distributed, decarbonised, new energy infrastructure through its
waste-to-value solutions for hydrogen, biofuels, and energy
generation, announces that North Fork Community Power, LLC ("NFCP")
has entered into an agreement for a financial restructuring with
the project lenders ("Lenders"), for the provision of a standby
facility, in the amount of USD 4.3 million, towards full funding of
the project up to the commercial operations date ("COD") of a
plant, with EQTEC technology at its core, in North Fork California,
USA (the "Plant").
The third-party funding has been agreed as part of a
pre-negotiated petition filed by NFCP for relief under Chapter 11
of the US Bankruptcy Code, following alignment between NFCP
managing members, including the Company, with the Lenders. The
agreed terms specify funding for the Plant construction and
commissioning, and for recruitment, training and onboarding of the
Plant operations staff, as well as for legal and other costs
associated with the Chapter 11 process itself.
The terms also specify that the Company will remain as an equity
shareholder in NFCP with the final shareholding being determined
during the legal process. However, any further drawdown on the
convertible loan facility committed by the Company in 2021, of
which c. USD 1.5 million remains undrawn, will no longer apply
thereby preserving the Company's financial resources. The Company
has no plans to make any further investments into NFCP.
COD for the Plant is expected in Q3 2023 and the power purchase
agreement ("PPA") has been extended accordingly. Once the Plant is
fully operational, NFCP has a range of options for refinancing the
Plant, including but not limited to sales of the tax credit,
traditional asset finance by banks and public sector loans. All are
currently under review and consideration by NFCP.
David Palumbo, CEO of EQTEC, commented:
"I am pleased we have reached a practicable arrangement for
completion of the North Fork project, one of the longest-standing
projects in our portfolio and a seminal facility for California,
Phoenix Energy and for EQTEC in the USA. Our dedication to the
North Fork community and to the prevention of forest fires across
the state more generally has been evident in our investment and
engagement with the project well beyond our typical remit. Our
partners, Phoenix Energy, have demonstrated similar commitment, and
the flexibility and support from Lapis is a testament to the import
of this first, reference project under the BioMAT programme. I am
delighted not only that we can progress the project but that we
will now take it to completion with dedicated partners who also
have at heart the interests of the community and of sustainable,
green energy production."
About the NFCP project
The NFCP project will result in a 2MWe biomass-to-energy plant
based on EQTEC syngas technology that will transform locally
sourced forestry waste into power and biochar for the local
community. The project has encountered successive delays since late
2021 as consequences of the Covid-19 pandemic and one of the
largest wildfires in the State's history near the construction
site. Shipping delays, legally enforced work stoppages during fire
warnings and COVID lockdowns have all undermined progress. Despite
this, all EQTEC technology was delivered, and construction
continues.
The Company in December 2021 announced a new partnership with
Phoenix, NFCDC and Carbonfuture GmbH to help Sierra Nevada
communities sequester carbon, reduce wildfire risk, generate green
energy, create jobs and support the local community whilst
generating tradeable carbon credits.
On 14 October 2021, the Company announced agreement with NFCP
and the Lenders, Lapis Advisers, LP, to invest an additional c.
US$2.8 million in the NFCP project, increasing the Company's equity
in the project to 49%. The Company has also provided a US$4.5
million convertible loan facility to fund the development of the
Project.
Catastrophic wildfires in California have made clear the urgency
of forest management efforts that reduce risk and improve forest
health. NFCP is a forest-based biomass gasification plant that will
utilize sustainable local forest biomass as well as fire threat
reduction activities from the Sierra and Yosemite National Forest
areas which will benefit local communities.
The project is located on the site of an abandoned sawmill from
the 1990s, bringing back sustainable jobs to this rural community
in the Sierra Nevada. The project originated by the North Fork
Community Development Council to both steward the environment and
promote economic redevelopment in the wake of the sawmill
closing.
Thanks to the proprietary Advanced Gasification Technology
developed and supplied by EQTEC, which is also a material capital
investor in the North Fork project, the process does not burn wood
and so the CO2 does not go up a stack. The waste wood is
transformed through EQTEC's patented process, into a hydrogen-rich
synthesis gas 'syngas' as it is reduced into a solid carbon
biochar. The process will generate 2MWe of renewable electricity
and biochar. Once produced, biochar is sold mostly to farms in
California's Central Valley to improve water efficiency, nutrient
conservation, beneficial microbial composition, and overall
quantity of stable organic matter. As the carbon remains in the
soil permanently it becomes an important tool of carbon
sequestration ability as well as other ecosystem benefits. The
produced biochar will help sequester 20,000 tonnes CO2 equivalent
over the next five years.
ENQUIRIES
EQTEC plc +44 20 3883 7009
David Palumbo / Nauman Babar
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Strand Hanson - Nomad & Financial Adviser +44 20 7409 3494
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James Harris / Richard Johnson
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Panmure Gordon - Joint Broker +44 20 7886 2500
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John Prior / Harriette Johnson
---------------------
Canaccord Genuity - Joint Broker +44 20 7523 8000
---------------------
Henry Fitzgerald-O'Connor / James Asensio /
Patrick Dolaghan
---------------------
Alma PR - Financial Media & Investor Relations +44 20 3405 0205
---------------------
Josh Royston / Sam Modlin EQTEC@almapr.co.uk
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+44 20 7457 2381
Instinctif - General Media Enquiries +44 788 788 4794
---------------------
Chris Speight / Tim Field EQTEC@instinctif.com
---------------------
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.
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
.
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