EQTEC PLC (LON:EQT) has agreed a deal with bond investors to help tie up the investment needed to kick off its North Fork biomass project in California after forest fires disrupted the financial process.
Working with Phoenix Biomass Energy Inc, the company said it had 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.
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This agreement does not require the sale of tax credits awarded by the State of California attaching to the bonds, EQTEC said, contrary to initial plans, which had been held back the finalisation of legal documentation for the bonds past the expected October deadline.
EQTEC said these documents being reviewed by all parties and it now expects financial close to “before the end of 2019”.
“It has been a busy number of months with numerous work streams being progressed, with particular focus on introducing project funding options to our partner, Phoenix Energy,” said chief executive David Palumbo.
He said the project had received “strong local support” as it is expected to help improve California’s problems with forestry wood waste.
“We are confident that this would be the first of many more projects in California with Phoenix Energy,” he added, noting that last year’s California Senate Bill 901 authorises US$200mln per year for five years from the state's Greenhouse Gas Reduction Fund for wildfire prevention, primarily in the form of hazardous fuel reduction projects.
