Proposed Joint Venture with Hydrogen Utopia International Plc for a non-recyclable
Waste Plastic to Hydrogen facility in the Republic of Ireland
Powerhouse Energy Group Plc (AIM: PHE), a company pioneering integrated technology which converts non-recyclable waste into low carbon energy, is pleased to announce that it has agreed heads of terms (“HoTs”) with Hydrogen Utopia International Plc (AQSE: HUI) (“HUI”) for the proposed joint development of a site at Lanespark in Co. Tipperary in the Republic of Ireland. It is anticipated that this would if developed lead to PHE’s first operational full scale waste plastic to hydrogen facility outside of the UK (the “Lanespark Project”).
PHE and HUI have agreed, in principle, to establish a joint venture vehicle owned equally by each company (“JVCo”) to which PHE and HUI would contribute development costs for the Lanespark Project on a 50:50 basis.
Under the HoTs, it is anticipated that PHE will pay HUI a non-refundable payment of £400,000 in cash, and advance to HUI a loan of £600,000, each in recognition of HUI’s contribution to date to the Lanespark Project. It is anticipated that the Lanespark Project, which encompasses a suitable site in an EU Just Transition Fund region, would provide potential access to an investment grade plastic feedstock supplier and the potential to agree offtake for the facility’s anticipated hydrogen and syngas outputs.
PHE’s participation in JVCo is subject to definitive agreements for the Lanespark Project being entered into and is also conditional upon the current lessee and the freeholder of the site agreeing to provide JVCo with a mutually acceptable ownership interest in the site, which would assist in the ability for Project Lanespark to be financed (the “Title Condition”). HUI is in advanced discussions with the relevant parties to seek to satisfy the Title Condition.
It is expected that the loan to be provided to HUI by PHE, will be made available for drawdown in whole or in part upon satisfaction of the Title Condition and on entering into the definitive agreements for Project Lanespark. The loan would have a term of up to two years, with redemption in full possible after one year through a bullet repayment reflecting rolled up interest and capital of £660,000 or at the end of the full two year term through a bullet repayment reflecting rolled up interest and capital of £750,000. It is also anticipated that HUI will provide PHE with security for the loan through a charge over its shares in JVCo.
In recognition of the fact that the Lanespark Project will supersede any pre-existing arrangements between HUI and PHE, the parties have agreed that on entering into the definitive agreements, the existing exclusivity agreement between PHE and HUI’s UK operating subsidiary, as well as the related existing collaboration agreement, will each be mutually terminated without any further obligation on either party.
As part of its evolving business model, PHE will consider collaborations with third parties similar to this on future projects. Powerhouse also continues to support and be the technology provider to Peel NRE Ltd – part of Peel L&P – and its SPV at Protos Strategic Energy & Resource Park in Cheshire, UK.
Keith Riley, Interim Chairman of PHE commented:
“This is an important strategic step forward for Powerhouse Energy. Not only does it provide a new project for Powerhouse’s hydrogen production technology, it also represents our first major project outside the UK, and the first time Powerhouse has been party to the special purpose vehicle that will develop and construct the facility. We will have a seat at the table in the project decision making, aligning the interests of both HUI and PHE in its success.”
Paul Drennan-Durose, CEO of PHE, commented:
“Powerhouse Energy must create a quality of choice on projects. In this early stage of commercialisation there is a need to consider the unusual, and to have a more flexible business model. The Republic of Ireland is also a good fit for Powerhouse at this stage in its evolution, its close enough to avoid an overreach and it is anticipated that the solution will be of great benefit to local communities, the private sector, and to the state.”
For more information, contact:
Powerhouse Energy Group plc
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