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EQTEC primed to become one-stop-shop for waste-to-energy projects

Snapshot

Here Proactive takes a closer look at green technology group EQTEC PLC (LON:EQT)

EQTEC

Quick facts: EQTEC PLC

Price: 0.135 GBX

AIM:EQT
Market: AIM
Market Cap: £4.31 m
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What the company does

The EQTEC Gasifier Technology, or EGT, turns household waste into electrical and thermal energy. So, the business model is simple: source waste-to-energy projects and sell the developers an EGT along with and operation and maintenance contract. In a recent update, it fleshed out its approach. It said it was targeting power generation systems fed by municipal waste, waste olive oil and biomass. The aim ultimately is to become a ‘one-stop-shop’ for the technology, design, the build and the operation and management of these projects.

 

Municipal waste

In the municipal waste and refuse business EQTEQ is partnered with China Energy Engineering Corporation and COBRA Instalaciones Y Servicios. At the Billingham project, the company and COBRA are partnered with Scott Bros Enterprises for a proposed 25-megawatt power plant. Once operational, Billingham will process some 200,000 metric tonnes of refuse-derived fuel - made from municipal waste – per year. The project is expected to be worth between £150mln and £180mln. In October, the memorandum of understanding was extended until July 2020.

EQTEC and COBRA are continuing efforts to deliver other similar opportunities in the UK.

 

Oil pomace waste

The company is in talks with a ‘major Spanish business group’ over a possible opportunity that will aim to elimination of olive pomace waste in the Mediterranean area. EQTEC has history in this area, having deployed its technology in 2011. Via a new partnership, the company believes it will be able to rapidly expand its presence in the market.

 

Biomass

The company’s proprietary gasification technology was selected by Phoenix Energy for two biomass power plants in California. Designs for the first plant have already been completed, and, it is presently in talks with Phoenix over a potential deeper collaboration. 

It signed a €2.2mln contract to provide equipment, engineering and design services to North Fork Community Project (NFCP), a biomass gasification scheme in California, where it acquired 19.99% stakes by providing equipment.

In early November, EQTEC agreed a deal with bond investors to help tie up the investment needed to kick off the project after forest fires disrupted the financial process.

The company has agreed, in principle, “a path to financial close” with investors interested in its US$9.3mln of tax-exempt bonds and US$5.5mln of other bonds.

Once commissioned, the project will have a valuation of around US$20mln, according to NFCP’s estimates, and will be capable of generating revenues of around US$4mln a year.

Meanwhile, the group has also inked an agreement to develop a 1.18 megawatt (MW) biogas power plant in the area of Gratens in France.

Under the €5.5mln (£4.7mln) commercial agreement with French group Biomasse 31, EQTEC’s first in the country, it will provide the technology, equipment and services required to construct the plant.

 

How it is doing

In the six months ended June 30, the AIM-listed firm almost tripled sales, with revenues rising to €1.56mln from €550,000 in 2018, ending the period with net current assets totalling €530,000 compared to net current liabilities of €2.65mln at the end of 2018.

In October, it completed its first maintenance contract with Transports Metropolitans de Barcelona (TMB), the public transport operator in Barcelona, Spain, to overhaul of the engine cogeneration unit at TMB's Horta Station in Barcelona.

Following completion of these works, EQTEC will retain the preventive maintenance contract until May 2020 for both TMB's Horta Station and a second project, at TMB's Triangle Station.

With the shares trading at 0.1p as of 13 November 2019, EQTEC carries a market cap of £2.8mln.

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Watch

EQTEC signs framework agreement with California-based Phoenix Biomass Energy

EQTEC Plc's (LON:EQT) Ian Price adds some detail to the agreement announced today with California-based firm Phoenix Biomass Energy to develop biomass gasification power plants in the US. The companies have already identified five projects in the US. EQTEC will provide its proprietary...

on 22/5/19

3 min read