AFC Energy PLC (AIM:AFC, OTC:AFGYF) and Speedy Hire PLC (LSE:SDY) have launched a 50:50 joint venture, Speedy Hydrogen Solutions (SHS), which has committed to an initial £2 million order of H-Power Generators for delivery in the next six months.
AFC will sell the hydrogen-powered generators to SHS, which will hire them to Speedy Hire for it to then hire them to its customers in the UK and Irish construction trade on exclusive three-year contracts.
The first of these systems is expected to be available later this year.
As well as the initial orders, AFC will generate revenue from maintenance and other technical services, and have the chance to potentially also make more from providing ancillary support and equipment.
SHS does not expect to hire employees nor commit to new facilities at this time, with Speedy Hire providing marketing, accounting and logistical support for SHS, the companies said in statements on Wednesday that followed an agreement to form a JV in July.
The initial supply agreement includes the committed £2 million initial order, with the intention to increase orders up to around £4.7 million across the first full contract year ending 31 October 2024.
SHS is being initially funded by AFC and Speedy Hire each injecting £625,000 of cash via a subscription for shares, with both companies agreeing to jointly fund the JV up to £2.5 million each, subject to performance, via further subscriptions or loans.
AFC noted that its cash reserves stood at roughly £27 million at the end of last month.
Speedy Hire noted that the H-Power Generators are designed to work in harmony with battery storage units supplied from Green Power Hire, a company it recently acquired.
Speedy Hire chief executive Dan Evans said the JV will offer “sustainability solutions that are increasingly critical and in demand from our customers”.
AFC boss Adam Bond added that SHS “will support the UK and Irish construction sector's transition away from diesel towards its ambitious decarbonisation targets, representing a game changer in the way sustainable off-grid power is delivered to industry” and said there had already been strong interest from contractors.