EQTEC PLC (AIM:EQT), the waste-to-energy group, has said the project to recommission its technology demonstration plant, the EQTEC Italia Market Development Centre (Italia MDC) in Gallina, Italy, remains on track with commercial operations scheduled for December 2022.
The Italia MDC plant will be a showcase for EQTEC technology in a live, commercial environment and will also be a clean solution for conversion of locally sourced agricultural waste into energy.
It is expected to be a successful investment with a healthy and sustainable profitability and rate of return, EQTEC noted.
The company expects to take delivery of the last, critical, ancillary equipment this week, with mechanical and electrical completion of the plant anticipated by the end of November.
The company said it will continue to provide updates on its progress with Italia MDC in the run-up to full operation.
EQTEC said it has worked with the plant’s existing investors to identify ways to make it more resilient to changing economic conditions.
The investors have now agreed to invest in enhancements that will allow the plant to produce biochar, for which there is a growing market in Italy and Europe more generally.
Additionally, the investors have agreed to the installation of an additional feeding-in system so that the plant can accommodate both low-density and high-density feedstocks, which will allow it to vary its feedstocks as market conditions change and to add biochar as a revenue stream.
Other augmentations, such as the addition of a dryer and a thermal oxidizer will make the plant more self-sufficient and give the operation greater control over the end-to-end conversion process, EQTEC said.
It noted that the new financial model for the plant currently forecasts revenues of around €2.6mln and EBITDA of €1.0mln a year from the commercial operations date until the end of 2027.
To fund these additional investments, the special purpose vehicle EQTEC Italia MDC Srl has raised €1.45mln through a combination of shareholder loans and equity from Quainstone Limited and EQTEC, each subscribing for half of the amount.
As a result, the relative ownership of the special purpose vehicle (SPV) has changed, with Quainstone now holding 48.25%, MetalNRG 15.88% and Pitcole Limited 15.88%.
EQTEC’s share remains largely unchanged at 19.99% as the majority of its participation was through a shareholder loan, intended to be repaid with a bank refinance after commercial operations begin.
"We are eager to get the Italia MDC up and running as another demonstration of EQTEC's technology in a live, commercial environment,” said David Palumbo, CEO of EQTEC in a statement.
“We expect to see operational availability of 90% or more, as we have seen at the plant we commissioned in Spain over a decade ago. I am especially pleased that our fellow SPV investors have supported additional investment to improve the Italia MDC's business proposition and are already looking at other opportunities to invest and deploy EQTEC's technology in other areas.
“I look forward to sharing the news of mechanical and electrical completion, COD and operational performance of the plant. We expect a busy programme showcasing the plant early in 2023, with a number of strategic and project investors interested to see the live operations," he concluded.
EQTEC is also currently pursuing the construction and commissioning of additional MDCs in Croatia, France and the UK.