Powerhouse Energy Group PLC (AIM:PHE, ETR:BT81) (PHE) said it has agreed variations to its existing collaboration agreements with Peel NRE Ltd which will facilitate the company taking a shareholding in the Protos plastics-to-hydrogen project.
The move follows on from news, announced on August 15, 2022, that PHE was taking a 50% shareholding in Protos Plastics to Hydrogen No 1 Ltd.
PHE said the collaboration agreement dated August 9, 2019, made between the company, Peel Environmental Limited, Waste2Tricity Limited, and Waste2Tricity (Protos) Limited, as amended by a letter dated October 29, 2021, has been extended until March 31, 2023.
The collaboration agreement establishes the formal relationship between PHE and Peel to develop a project using PHE's Distributed Modular Gasification (DMG) Technology on the Protos site. It commits the counterparties to seeking funding for the initial development and working together on 10 further projects. It also commits the counterparties to exclusivity and 'non-compete' and mutual confidentiality during the collaboration period.
The company said an option for exclusivity agreement in respect of the development and deployment of the DMG technology has been extended to an option end date of March 31, 2023.
Under this agreement, PHE granted Peel an option to enter into an exclusivity agreement with it in consideration of a payment to PHE of £500,000, superseding relevant terms set out in the collaboration agreement. The option period commenced on PHE agreeing to acquire the entire shareholding of Waste2Tricity Ltd.
If exercised, the option will give Peel the exclusive right to develop, distribute, promote, and operate DMG Technology in the United Kingdom. It does not, however, prevent PHE from carrying out business unrelated to DMG Technology, provided it does not compete for the same plastic feedstock required by an existing or contemplated project of Peel.
It also anticipates the parties entering into a service agreement with provision for an annual licence fee of £500,000 per annum (indexed) to be paid to PHE. The service agreement was entered into on June 30, 2021.
Loan facility agreement extended
PHE also announced that the loan facility agreement with Protos Plastics to Hydrogen No1 Limited has been extended until March 31, 2023, with all other conditions remaining unchanged.
The loan facility agreement was signed on May 11, 2021, to provide the Peel special purpose vehicle for the Protos plastics to hydrogen project with the ability to draw down funds from PHE up to the sum of £3,800,000. The loan is be repaid on the date of the final investment decision of the project and carries a coupon of 2% above base rate. The loan is secured by a step-in on the lease of the project site.
In a statement, Keith Riley, interim chairman and acting CEO of PHE commented: "This facilitates PHE taking the shareholding in the Protos plastics-to-hydrogen project. PHE looks forward to working closely with Peel to bring the project to fruition and providing further updates in due course."
Powerhouse Energy has developed a process technology which can utilise waste plastic, end-of-life-tyres, and other waste streams to convert them efficiently and economically into syngas from which valuable products such as chemical precursors, hydrogen, electricity, heat and other industrial products may be derived.
The process produces low levels of safe residues and requires a small operating footprint, making it suitable for deployment at enterprise and community level.