Alkaline Fuel Cell Power Corp. (NEO:PWWR.AQN) said it has completed the acquisition of AI group’s combined heat and power (CHP) generation business, providing the company with immediate recurring, long-term gross operating income from a current active account.
The AI group comprises AI Renewable 2018-I Limited Partnership, AI Renewable 2020-I Limited Partnership and 2191 Yonge Ltd, and the deal was previously announced on March 4, 2022.
The CHP generation business also has a pipeline of projects, that once secured, will provide additional sources of gross operating income. Securing the pipeline of projects remains subject to mutual agreement with the potential accounts, the company said.
READ: Alkaline Fuel Cell Power strikes deal to buy AI's heat and power business, providing step-change in plans for growth
AI's pipeline consists of over 30 potential projects at various stages of development ranging from proposals, letters of intent and one power purchase agreement ready to begin the engineering, procurement and construction phase. The estimated capital investment to bring the pipeline of potential CHP systems into commercial operation within the next 24-36 months is estimated at $50,000,000.
Based on the combined heat and power generation system currently in commercial operation, potential gross revenue could be up to approximately $16.61 million and potential EBITDA (Earnings before interest, taxes, depreciation, and amortization) could be up to approximately $7.68 million and potential net income up to approximately $1.64 million, the company added.
Under the terms of the definitive agreements, Alkaline Fuel Cell Power paid a purchase price consisting of 22,575,758 of its common shares and $3,000,000 in cash consideration. In connection with the execution of the definitive agreements, the company advanced a $2,000,000 loan to the vendors, which was applied against the cash consideration on closing. The remaining $1,000,000 cash payment shall be paid no later than January 2, 2023.
AI uses a clean and renewable single fuel source energy technology that generates both electricity and heat. The stable and efficient energy production results in cost savings to the customer and a reduction in greenhouse gas emissions.
AI's high-efficiency CHP system provides reliable, sustainable and efficient, on-site energy 24/7. It can be adapted to not only residential but commercial and industrial customers. Furthermore, the company has identified technology that will allow them to transition AI's current CHP systems to utilize hydrogen and the AFCP fuel cells allowing for AFCP to grow exponentially while generating revenue.
Alkaline Fuel Cell Power is focused on the development, production and commercialization of micro-combined heat and power (micro-CHP) systems based on alkaline fuel cell technology. A fuel cell is a clean electrical power conversion/generation system, akin to small power stations that provide electricity and an equivalent amount of heat for various purposes.
Based on hydrogen-powered alkaline fuel cell technology, its technology offers an energy source that generates zero CO2 emissions with pure water as the only by-product, making it ideally suited for residential and small- to medium-sized power markets.
Contact the author at jon.hopkins@proactiveinvestors.com