Oracle Power PLC (AIM:ORCP), the international natural resources project developer, is pleased to announce that further to the announcement of 1 September 2022, the Company’s joint venture company.
Oracle Energy Limited (“Oracle Energy” or the “Joint Venture”), has been issued a Letter of Intent (“LOI”) from the Directorate of Alternative Energy of the Government of Sindh (the “Directorate of Alternative Energy”), relating to the establishment of a 1,200MW hybrid solar/wind, green hydrogen/power project (the “Project”) in Pakistan. The issuance of the LOI follows the Directorate of Alternative Energy’s confirmation of receipt of a $600,000 bank guarantee (the “Bank Guarantee”) from Habib Metropolitan Bank, Karachi (“Habib Metropolitan”) valid for 12 months, on behalf of Oracle Energy.
Highlights / Key Terms of the LOI
· The LOI sets out that the developer of the Project can produce green hydrogen from a 400MW capacity electrolyser facility and renewable power for business-to-business usage, for possible sale to utilities and for other uses.
· In accordance with the LOI, Oracle Energy is required to complete certain milestones in the next 18 months which include, inter alia, feasibility and environmental studies, securing water use agreements, completing grid studies for interconnection, obtaining a tariff from the National Electric Power Regulatory Authority (“NEPRA”) if required, providing a further bank guarantee of US$3 million and receiving a Letter of Support from the Directorate of Alternative Energy.
· Oracle’s share of the funding requirement for these milestones will be from current cash and additional funding as required during the course of development.
· Provided the required milestones have been met by Oracle Energy up to that time, the LOI can be extended beyond the initial 18 months, in the event that the relevant regulator fails to announce or award a tariff due to delays on the account of Government processes. Extensions can be repeatedly provided for six months at a time and during any period of extension, if the tariff is awarded, Oracle Energy is required to obtain a Letter of Support by submitting the required further US$3 million bank guarantee.
· Oracle Energy will also coordinate with a panel of experts from the Directorate of Alternative Energy to determine site layout, sub-station design, transmission line, interconnection arrangements and other related operational and technical matters.
· The Directorate of Alternative Energy may terminate the LOI and encash the Bank Guarantee if, inter alia, the requisite milestones are not met, or the Bank Guarantee is not extended.
The Bank Guarantee provided by Habib Metropolitan on behalf of Oracle Energy is valid for 12 months; however, Oracle Energy has been advised by Habib Metropolitan that the guarantee can be extended at Habib Metropolitan’s discretion and subject to certain terms.
Naheed Memon, CEO of Oracle, commented:
“This LOI gives us the confidence to move forward determinedly with our pioneering green hydrogen project in Pakistan. With the support of the Directorate of Alternative Energy, and of course our joint venture partner, His Highness Shaikh Ahmed Dalmook Al Maktoum, we are in a solid position to make material progress with our plans to establish a hybrid solar/wind, green hydrogen/power project of up to 1,200MW in a rapid timeframe.
“As we look now to the milestones set out in the LOI, including relevant studies and securing required infrastructure we will, in parallel, look to deliver and expand our commercial initiatives to ensure we have a comprehensive and wide-ranging array of options to maximise value for investors, and commercialise this transformative energy source. I look forward to providing updates on our progress in this regard over the coming weeks and months.”
This announcement contains inside information for the purposes of Article 7 of EU Regulation No. 596/2014, which forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018, as amended.
For further information please contact:
Oracle Power PLC
+44 (0) 203 580 4314
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