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EQTEC rockets after announcing its first Californian power project

"We look forward to signing the sales contract over the coming weeks and visiting the US to explore further opportunities and projects together," said Ian Price, the chief executive officer of EQTEC.
Biomass plant
"We are delighted to have a partner who shares a vision for building out a network of distributed biomass generation," said Gregory Stangl, the CEO of Phoenix Biomass

EQTEC PLC (LON:EQT), the waste gasification to energy project specialist, is to jointly develop a biomass gasification power project in California, USA.

It is the first agreement to result from the framework agreement, announced last month, with California-based firm Phoenix Biomass Energy to develop biomass gasification power plants in the US.

READ EQTEC joins forces with Phoenix Biomass Energy to develop US biomass plants

EQTEC has signed a legally binding agreement with Phoenix and North Fork Community Development Council to acquire 19.99% ownership of North Fork Community Power, a special purpose vehicle that has been formed to build and operate a 2 megawatt biomass project in North Fork, California.

EQTEC is paying for its stake by supplying certain items of equipment currently held at EQTEC's Newry site, valued at US$2.5mln. No cash is changing hands.

The gasification trechnology company said it expects to invoice North Fork Community Power €2.2mln (US$2.5mln), under a separate sales contract, for the sale of further equipment and the supply of engineering and design services to North Fork Community Power.

The sales contract, which upon signing will involve a substantial down payment together with further agreed milestone payments until commissioning, is expected to be completed and signed by the end of June 2019.

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

"We are delighted that our framework agreement with Phoenix is already progressing at speed and creating significant value to all stakeholders,” said Ian Price, the chief executive officer of EQTEC.

“This transaction fits with our strategy to have diversified revenue streams and it is a major step for the company and for all shareholders," he added.

Gregory Stangl, the chief executive officer of Phoenix, paid tribute to EQTEC's technology, saying it represented a “repeatable, scalable solution that could have a big impact on California's tree mortality crisis and related climate challenges”.

Shares in EQTEC shot up 25% to 0.6p following the announcement.

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EQTEC PLC Timeline

January 28 2019

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