Newry Biomass Ltd, 50.01% owned by React, will via a €5mlndeal with Spanish company EBIOSS Energy acquire the EQTEC Integrated Biomass Gasification Power Plant which will power the project.
React said, in a statement after the market’s close on New Year’s Eve, that the repowering costs are estimated at £8mln (including the acquisition costs).
As React’s sharp share price rally, up 111% to 4.75p this morning, reflects the new deal is seen as a second chance for the Newry venture.
The project, which is now envisaged a 4 megawatt capacity, was granted planning permission in May 2009 as a waste-to-energy plant. Some 25,000 tonnes of wood would be processed to generate that power, according to estimates at that time.
The Newry Biomass plant was subsequently built with the support of investments amounting to £11.7mln (including £5.75mln from React), but, the original gasification technology underperformed.
It was put on ‘care and maintenance’ in September 2014 whilst new funding and technology was sought.
Newry Biomass intends to raise the necessary finance to complete the acquisition and plant upgrades before the end of the first quarter.
Once the deal reaches financial close, Newry Biomass expects the plant will be able to export power to the grid within 15 months.