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AFC Energy unveils second Korean deal in a week

Landmark deal was set up by Korean bank Daewoo and will see AFC supply Daniel Inc with up to US$15mln worth of alkaline fuel cell systems.

Fuel cell group AFC Energy (LON:AFC) has announced its second major commercial agreement in Korea in the space of a week.

Daniel Inc, a Korean fuel cell specialist, has signed a heads of agreement, described as a landmark for the UK company, for a one megawatt (Mw) system with an option for a separate 3Mw project.

In total, sales could reach US$15mln, which would make it the largest fuel cell deal signed by any British company in Korea.

The contract was brokered by Korean bank Daewoo, which will also act as an introducer for AFC with other clients.

Earlier this week, AFC signed a memorandum of understanding with Korean chemical firm Chang Shin for up to 5Mw of electricity capacity and using multiple fuel cell systems.

Ian Williamson, AFC Energy’s chief executive, said the agreement with Daniel was a tremendous opportunity and would help it build a truly world class British fuel cell company focusing on industrial, chemical and utility sectors.

“After entering this market less than two years ago, we have now established a significant bridgehead with strong partners and believe that this is the first of many more orders to come from this country."

Nathan Dohyoung Kang, Infra Private Equity team leader at KDB Daewoo Securities [Daewoo], added there was huge potential in AFC Energy's technology in the fuel cell space that is the perfect antidote to South Korea's renewable energy issues.

Daniel Inc will deploy the initial 1MW alkaline fuel cell system in stages. Under the terms, a deposit of US$1.25 mln will become payable to AFC once the contract is signed.

At that point a decision will also be made over the 3Mw project.

The 1Mw system will use a mixture of liquefied natural gas (LNG) and biomass gas as its primary energy source to generate electricity. AFC Energy will install, operate and maintain the systems at Daniel Inc's site.

In addition to Korea, AFC is working on a €6.1mln EU-backed project, Power-Up, with Air Products at a major chemicals complex in northern Germany and has an ongoing strategic project with AkzoNobel at their site in Bitterfeld, Germany.

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AFC Energy PLC Timeline

November 01 2018

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