TIDMEQT
RNS Number : 1259H
EQTEC PLC
22 November 2022
22 November 2022
EQTEC plc
("EQTEC", the "Company" or the "Group")
Italia MDC: Project update, new investment and shareholding
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 is pleased to provide an update on the EQTEC Italia
Market Development Centre in Gallina, near Castiglione d'Orcia,
Tuscany, Italy ("Italia MDC") and in particular, on improvements to
the plant (the "Plant") in support of a sustainable business model,
funded by its existing investors (the "Investors"), as set out in
the Company's announcement on 21 June 2021.
Project status
The project to recommission the Plant (the "Project") remains on
track, with the commercial operations date ("COD") scheduled for
December 2022, subject to the availability of service providers to
complete work on ancillary equipment. Earlier this year, the
Company employed an operations manager and operations specialists
to run the Plant and has had EQTEC operations & maintenance
("O&M") specialists on site since October, to train and support
the ramp up of the local team. The Company expects to take delivery
of the last, critical, ancillary equipment this week, with
mechanical and electrical completion of the Plant anticipated by
the end of November 2022.
The Project has overcome a number of unexpected delays with
on-time delivery of key components and availability of service
providers to support commissioning of specific pieces of ancillary
equipment.
The Company intends to continue communicating its progress with
Italia MDC in coming weeks, in the run-up to full operation of its
first Market Development Centre ("MDC"). The Company is also
currently pursuing construction and commissioning of additional
MDCs in Croatia, France and the UK.
Business model resilience
In addition to being a showcase for EQTEC technology in a live,
commercial environment, the Italia MDC will be a clean solution for
conversion of locally sourced agricultural waste into energy, in
the Val d'Orcia of Tuscany. It is expected to be a successful
investment with a healthy and sustainable profitability and rate of
return. Throughout the recommissioning of the Plant, the Company
has worked with the Investors to identify ways of making the
business model of the Plant more resilient to changing economic
conditions, flexible in pursuing future opportunities and
sustainable as a business interest.
The Investors have agreed to invest in specific enhancements to
the Plant that will allow it to produce biochar, for which there is
a growing market in Italy and Europe more generally. Additionally,
the Investors agreed to installation of an additional feeding-in
system so that the Plant can accommodate both low-density and
high-density feedstocks. These augmentations will allow the Plant
to vary its feedstocks as market conditions change and to add
biochar as a revenue stream. Other augmentations, such as addition
of a dryer and a thermal oxidizer will make the Plant more
self-sufficient and give the operation greater control over the
end-to-end conversion process.
The new financial model approved by the Board of Directors and
shareholders of Italia MDC currently forecasts revenues of c.
EUR2.6 million and EBITDA of c. EUR1.0 million per year from COD
through end of 2027.
New investment and resulting shareholding
To fund these additional investments, EQTEC Italia MDC Srl (the
"SPV") has raised c. EUR 1.45 million through a combination of
shareholder loans and equity from Quainstone Limited and the
Company, each subscribing approximately for half of the amount,
resulting in a change to relative ownership of the SPV. The
Company's share remains largely unchanged as the majority of its
participation was through a shareholder loan, intended to be repaid
with a bank refinance after COD. The updated capital ownership of
the Plant is as follows:
Investor Ownership share
------------------------ ----------------
Quainstone Limited 48.25%
EQTEC Holdings Limited 19.99%
MetalNRG Eco Limited 15.88%
Pitcole Limited 15.88%
------------------------ ----------------
TOTAL 100.00%
David Palumbo, CEO of EQTEC, commented:
"We are eager to get the Italia MDC up and running as another
demonstration of EQTEC's technology in a live, commercial
environment. We expect to see operational availability of 90% or
more, as we have seen at the plant we commissioned in Spain over a
decade ago. I am especially pleased that our fellow SPV Investors
have supported additional investment to improve the Italia MDC's
business proposition and are already looking at other opportunities
to invest and deploy EQTEC's technology in other areas. I look
forward to sharing the news of mechanical and electrical
completion, COD and operational performance of the Plant. We expect
a busy programme showcasing the plant early in 2023, with a number
of strategic and project investors interested to see the live
operations."
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.
ENQUIRIES
EQTEC plc +44 203 883 7009
David Palumbo / Nauman Babar
---------------------------
Strand Hanson - Nomad & Financial Adviser +44 20 7409 3494
---------------------------
James Harris / Richard Johnson
---------------------------
Panmure Gordon - Joint Broker +44 207 886 2500
---------------------------
John Prior / Harriette Johnson
---------------------------
Canaccord Genuity - Joint Broker +44 207 523 8000
---------------------------
Henry Fitzgerald-O'Connor / James Asensio
/ Patrick Dolaghan
---------------------------
Alma PR - Financial Media & Investor Relations +44 203 405 0205
---------------------------
Josh Royston / Sam Modlin EQTEC@almapr.co.uk
---------------------------
+44 207 457 2381 / +44 788
Instinctif - General Media Enquiries 788 4794
---------------------------
Chris Speight / Tim Field EQTEC@instinctif.com
---------------------------
About the project
The Project constitutes a plant located on a site owned by
Toscana Cereali Societa' Cooperativa Agricola, from whom EQTEC
Italia MDC Srl is leasing. The 1MWe plant currently approaching
full commercial operation is capable of converting multiple types
of biomass feedstock into electrical power and thermal energy.
Initially, the plant will export electrical power to the national
grid, for which a connection has been secured with a preferential
tariff. Biomass feedstock will be provided by at least one local
supplier with alternative suppliers also prepared to supply
feedstock.
In addition to being a profitable, commercial-scale facility
with an important role in the local, agricultural community, the
Plant is expected to become a Market Development Centre for the
Company, so that it can showcase EQTEC technology to prospective
clients including Industrial, Utility, Municipal or other
Agricultural clients looking to replicate success with sustainable,
waste-to-energy technology.
The Company currently owns 19.99% of EQTEC Italia MDC Srl, with
an option to acquire further equity in the Project.
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 renewable 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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