EQTEC plc (AIM: EQT), a world-leading technology innovation company enabling the Net Zero Future through advanced solutions for hydrogen, biofuels, SNG and other energy production, is pleased to provide the following UK Projects update at the end of 2021.
Billingham Project update
The Billingham Project aims to install a 25 MWe waste gasification capability built around EQTEC technology to transform 200,000 tonnes or more per year of refused-derived fuel (RDF) from municipal solid waste into electricity, thermal energy and/ or a range of other chemicals and fuels. In January 2021, the Company confirmed it had secured planning consent for an improved scheme with a lower environmental impact and better commercial outcome.
In recent months, the Company has been actively engaged with Tier 1 EPC companies planning and costing for the front-end engineering design (“FEED”) work, which is intended to commence in early 2022.
Over the same period, developments in gas and power markets have created new and compelling opportunities for offtake from the plant. As a result, the Company has entered discussions with local, industrial offtake customers for potential provision of a range of syngas-to-power, syngas-to-heat and syngas-to-chemical applications.
As these discussions progress and FEED work commences, the Company anticipates steady progress toward financial close in 2022.
Deeside Project update
The Deeside Project seeks to create a complete, local waste-to-energy solution with a material recovery facility (“MRF”), a 2 MW anaerobic digestion (“AD”) facility built around Anaergia, Inc. (“Anaergia”) technology and a 9.9 MWe gasification facility built around EQTEC technology. The planned integrated facilitiy will transform c.182,000 tonnes per year of municipal, commercial and industrial waste into green electricity and other energy. Development of the full project is being undertaken by the Company in partnership with Logik Developments Limited (“Logik”).
The Company announced in March 2021 that it had entered into a formal, three-year Collaboration Framework Agreement (“CFA”) with Toyota Motor Manufacturing (UK) Limited (“Toyota”) for exploration of an innovative, circular and sustainable waste-to-energy solution for Toyota’s engine manufacturing plant in Deeside, including potential supply of biomethane gas and green electricity as well as conversion of manufacturing waste and reduction of the Toyota plant’s carbon footprint.
In October, the Company confirmed that the resolution to grant planning consent from the County Council for the advanced gasification facility was secured, following prior approval of the site for the original plan of a recycling and AD facility.
In December, the Company announced its intent with Logik to develop additional waste-to-value infrastructure on the Deeside site. The Parties are currently conducting additional feasibility studies for hydrogen and other biofuels to enhance the existing sustainable RDF-to-energy work on the Deeside Project.
Both the Billingham Project and the Deeside Project are part of the portfolio currently under review by a range of large-scale infrastructure investors and owner-operators for potential funding, commercial operation or both. The Company anticipates these discussions will progress to exclusivity and due diligence in early 2022.
Billingham and Deeside financial close deferrals and impact on Company revenue
In response to the new opportunities for both projects-particularly for offtake, the Company has elected to defer financial close for the Billingham and Deeside Projects until 2022. The Company believes these opportunities deserve further exploration and has focused its efforts on reviewing, modelling and assessing them, toward expansion of even greater positive impact for local communities and additional value for all stakeholders.
As a result of the deferrals, the Company will not invoice before the end of 2021 a total of c. €6 million in fees for development services on the two projects, as it had previously expected to do. The Company expects to recognise revenues from these fees in 2022 and remains confident of both projects’ reaching financial close in the same period.
However, and as previously announced, the Company continues to expect revenues in 2021 from technology sales to several entities and projects, including Agrigas of Larissa, Greece (“Agrigas”), the EQTEC Italia Market Development Centre (“MDC”) in Gallina, Toscana, Italy (“Italia MDC”), the Beliše, Croatia MDC (“Croatia MDC”), the Karlovac, Croatia project (“Karlovac”) and the Livadia, Greece project (“Livadia 1”), as well as from development services fees to the Croatia MDC, Karlovac, and Livadia 1.
With the deferral of financial close for its two largest projects, the Company anticipates its total revenues for 2021 to be in the range of €8 – 10 million (2020: €2.2 million), representing strong growth. In line with these deferrals, the Company currently forecasts an EBITDA loss (adjusted for one-off share based payments) in the range of €2.5 – 3.5 million, prior to closing additional projects that might fall into the current financial year.
David Palumbo, CEO of EQTEC, commented:
“2021 has been a transformative year for us and we will enter 2022 with a stronger balance sheet position. We delivered financial close on a number of deals, most importantly on two Market Development Centres, both to be operational in 2022 and to become showcases for our capabilities. We have accelerated conversion of pipeline opportunities into well managed projects and this sets us up for further, sustainable growth in 2022. On the one hand, we are disappointed not to have closed on Billingham and Deeside this year, but on the other, we believe these deals will develop into even more compelling propositions for EQTEC, local communities and our stakeholders. We are seeing growing interest in a wider range of applications for our syngas capabilities and growing attention from larger investors and highly reputable operators commited to the energy transition. I look forward to reporting strong progress in 2022 as we further leverage our platform for growth and scale in a rapidly evolving market.”
More information
This announcement contains inside information as defined in Article 7 of the EU Market Abuse Regulation No 596/2014 and has been announced in accordance with the Company’s obligations under Article 17 of that Regulation.
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EQTEC plc
+44 203 883 7009
David Palumbo / Nauman Babar
