EQTEC PLC North Fork Project Update (4738S)
November 06 2019 - 5:19AM
UK Regulatory
TIDMEQT
RNS Number : 4738S
EQTEC PLC
06 November 2019
6 November 2019
EQTEC plc
("EQTEC", the "Company" or the "Group")
North Fork Project Update
EQTEC plc (AIM: EQT), the technology solution company for waste
gasification to energy projects, today provides an update on the
biomass project in North Fork, California (the "Project"). The
Project relates to the proposed construction and operation of a 2
MW biomass plant by North Fork Community Power LLC ("NFCP"). As
announced on 4 June 2019, the Company entered into a legally
binding agreement to acquire a 19.99% interest in NFCP on financial
close of the Project.
On 23 July 2019, NFCP was granted final approval by the State of
California to issue tax-exempt bonds totalling US$9.3 million and
non-tax-exempt bonds totalling US$5.5 million (together, the
"Bonds"), a key milestone before the Bonds can be issued to
potential investors. The proceeds of the Bond issue, once
subscribed for, together with EQTEC's investment in-kind of US$2.5
million, is expected to enable the Project to reach financial
close. In addition, as announced on 3 September 2019, the Company
has signed an Equipment Sale and Services Contract with NFCP, with
a sales value of EUR2.2 million to the Company.
Due diligence being conducted by potential subscribers for the
Bonds and the finalisation of legal documentation has been ongoing
for several weeks. The Company initially expected the process for
the issue of the Bonds, which includes the sale of tax credits
awarded by the State of California attaching to the Bonds, would
complete towards the end of October 2019. However, the situation in
California, where forest fires have continued to cause disruption,
has unfortunately meant that it has taken longer than expected to
complete this process.
In order to potentially accelerate the closing of financing,
Phoenix Biomass Energy Inc. and the Company have agreed, in
principle, a path to financial close with the potential investors
in the Bonds, which does not require the sale of the tax
credits.
The legal documentation to finalise the subscription for the
Bonds is currently being reviewed by all relevant parties and the
Company expects financial close to now take place before the end of
2019. The Company will update the market in due course.
The Company also notes that California Senate Bill 901, enacted
in 2018, authorises US$200 million per year for five years from the
state's Greenhouse Gas Reduction Fund for wildfire prevention,
primarily in the form of hazardous fuel reduction projects. In
addition, California Senate Bill 1122 stipulates that 20% of the
additional 250 MW capacity outlined in the bill must come from
projects that rely on forestry sources.
David Palumbo, CEO of EQTEC, commented:
"It has been a busy number of months with numerous work streams
being progressed, with particular focus on introducing project
funding options to our partner, Phoenix Energy. We are encouraged
by the strong local support for the Project and the growing
realisation that the Project will have such an important positive
environmental impact, improving California's current critical
situation with forestry wood waste. We are confident that this
would be the first of many more projects in California with Phoenix
Energy. California Senate Bill 901 authorises US$200 million per
year for five years from the state's Greenhouse Gas Reduction Fund
for wildfire prevention, primarily in the form of hazardous fuel
reduction projects. We continue to progress conversations with
Phoenix Energy to further our collaboration to address this crucial
social and environmental appeal in the state.
Greg Stangl, CEO of Phoenix Energy, commented:
"Senate Bill 1122 was designed to combat the tree mortality
crisis in the Sierra. The bill dictates that 20% of the additional
250 MW capacity outlined in the bill must come from projects that
rely on forestry sources. There's a reason the state passed a law
forcing PG&E companies to buy power from projects like ours.
Our proposed plant in North Fork will help promote environmental
sustainability and reduce forest waste - and the chances of future
fires. This is a crucial mission that cannot wait. It is very
encouraging for us to have a technology partner such as EQTEC which
has not only addressed any engineering challenge that we have
thrown at them, but also now are heavily involved assisting with
the financial close of the Project."
This announcement contains inside information as defined in
Article 7 of the EU Market Abuse Regulation No 596/2014 and has
been announced in accordance with the Company's obligations under
Article 17 of that Regulation.
Enquiries
EQTEC plc +353 (0)21 2409 056
David Palumbo / Gerry Madden
Strand Hanson - Nomad & Financial Adviser +44 (0) 20 7409 3494
James Harris / James Dance / Jack Botros
SI Capital Limited - Broker +44 (0)1483 413 500
Nick Emerson / Jon Levinson
IFC Advisory - Financial PR & IR +44 (0) 20 3934 6630
Tim Metcalfe / Graham Herring / Zach
Cohen
Notes to Editors
About EQTEC plc
EQTEC is the technological solution partner for converting waste
to clean energy.
EQTEC mission is to provides sustainable technological solutions
to address two of the world's greatest challenges: managing rising
levels of waste and meeting the growing demand for clean
energy.
EQTEC's business model involves sourcing and providing
assistance in developing waste elimination projects which will
convert waste into clean energy, to which it will ultimately sell
its EQTEC Gasifier Technology ("EGT") and O&M services. EGT
enables project developers to construct waste elimination plants
and recover electrical and thermal energy from the waste
streams.
EQTEC sources projects that have a local supply of waste in need
of elimination and conversion. It builds relationships and brings
together the developers, the waste owners, the building contractors
and funders. It then supplies the energy recovery technology and
provides engineering services to the projects.
EQTEC also seeks to provide Operation & Maintenance services
to established operating co-generation plants generating recurring
revenues over the life of the projects.
The Company is quoted on AIM and trades as EQT. Further
information on the Company can be found at www.eqtecplc.com.
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END
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