EQTEC and local firm Rotunda have agreed to jointly develop a waste management project, to be held in a project special purpose vehicle that EQTEC has the option to acquire
The company has paid Rotunda Group £100,000 for the exclusive option to buy the project within the next 12 months, with the £100,000 to be deducted from the purchase price if EQTEC pulls the trigger on the deal. The exclusivity period can be extended, subject to mutual agreement.
EQTEC will be responsible for contributing 100% of the development costs before financial close on the project is achieved; these costs are currently estimated at around £500,000.
At financial close, EQTEC is set to see a return on the funds invested in the form of a development fee that will be no less than two times the funds it invested.
Rotunda has the option to participate in the project’s development capital and receive a proportional fee.
The site already has planning permission for a waste recycling facility, an anaerobic digestion facility, and 9 megawatts (MW) of electrical generation with 2MW of battery storage and the project has qualified for the UK Government’s Renewable Heat Incentive Scheme.
EQTEC will seek additional planning permission for its advanced gasification technology to be applied to the project to make it capable of converting more than 55,000 tonnes annually of refuse-derived fuel waste, which would be created by the proposed plant and otherwise destined for landfill or incineration, generating an estimated additional 6-8MW of ‘green’ electricity.
The company estimates that the additional capacity for the thermal conversion of waste using the group’s advance gasification technology has the potential to generate additional revenues for the project’s owner of around £70mln in electricity sales and, potentially, up to £15mln in heat sales over a 20 year period, and could save more than £80mln in waste disposal costs.
“I am delighted to announce this exclusive partnership to develop the hybrid energy park in Southport, Merseyside, UK, which underlines EQTEC’s strategy of engaging in partnerships with strong local players in energy infrastructure which are already in advanced stages of the planning and permitting process, and where EQTEC can add value with its proven, proprietary and patented advanced gasification technology and solutions,” David Palumbo, the chief executive officer of EQTEC said in a statement.
“EQTEC is selectively growing its pipeline of potential projects in the UK, as well as internationally, to help ensure that it can deliver attractive risk-adjusted returns for our shareholders and wider value to stakeholders,” he added.
Shares in EQTEC were up 3.5% at 0.6p in early deals.
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