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LONDON (Alliance News) - Active Energy Group PLC Tuesday said it has assigned the balance of its contract to supply wood chip from Montenegro to Biomasse Italia SpA to an unnamed, unrelated third party, a move it hopes will allow it to focus on its "rapidly expanding and high-margin" Ukraine operations and Canadian joint venture.
Active Energy signed the Biomasse Italia deal back in August 2013, but has since become the largest producer and exporter of processed wood products, including wood chip for MDF manufacturing, in Ukraine and want to focus on those operations, as well as its Canadian forestry and natural resources joint venture.
It said the move to assign the balance of the contract means it will no longer have any revenues or costs associated with it.
Active Energy later said it will Wednesday unveil its proposals for a Public-Private Partnership project with the Ukraine government at the New Ukraine 2015 Investment Conference in Kiev.
The company will propose that it will work alongside the Ukrainian government and international investment funds to accelerate the move away from the country's reliance on foreign energy imports towards a renewable energy industry based upon sustainable management and commercialisation of its forestry assets, and the development of a national network of Biomass-fuelled power plants.
"If the PPP proposal is accepted, AEG plans to construct and operate clean energy Biomass power plants in partnership with the Ukraine state authorities close to the forests to serve local villages, towns and cities, utilising waste wood and low-grade timber gathered from enhanced forestry operations, which would be conducted in strict accordance with international environmental guidelines and sustainable forestry management practices," Active Energy said.
As a first step in demonstrating the viability of the PPP initiative Active Energy is proposing to start a pilot project with the Ukraine State Agency of Forestry Resources to cover an initial 500,000 hectares of timberland in the country.
"We understand that experts from the international energy community, the EC, EU member states and international finance institutions are preparing proposals to assist Ukraine in achieving energy independence by attracting inward investment," Chief Executive Richard Spinks will tell the conference. "But if implemented, AEG's PPP initiative would be the first to tackle the problem head-on, with its focus on renewable clean energy Biomass power generation based on utilising the country's forestry resources."
Active Energy shares were up 5.2% at 7.15 pence midday Tuesday.
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
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