Eqtec Regulatory News (EQT)

16 September 2021

EQTEC plc

("EQTEC", the "Company" or the "Group")

Heads of Terms signed for additional investment in Billingham RDF-to-energy project

EQTEC plc (AIM: EQT), a world-leading gasification solutions company that is building the future of a cleaner waste-to-energy industry, is pleased to announce that it has signed a Heads of Terms (the "Agreement") with a strategic investor, Kibo Energy plc ("Kibo") (AIM: KIBO), for the proposed 25 MWe Billingham waste gasification and power plant (the "Project") at Haverton Hill, Teesside, UK.

The Company will continue to lead the development of the Project SPV, Haverton WTV Limited ("Haverton"), providing development strategy and services for integrated planning, commercial negotiation, funding and delivery readiness. Kibo's 54.54% investment and participation is intended to accelerate development progress, support pursuit of a wider range of commercial opportunities and de-risk the subsequent construction and commissioning phase.

Kibo and EQTEC rapidly identified a clear synergy and shared outlook on how energy infrastructure projects should be robustly developed and project managed successfully, making Kibo an ideal investment and development partner in the Company's anchor RDF-to-energy plant at Billingham.

The proposed investment by Kibo is subject to, inter alia, finalisation of a Share Purchase and Shareholders Agreement and the securing of the requisite funding by Kibo.

Highlights

· It is expected that Kibo will acquire a 54.54% equity stake in the Project SPV;

· EQTEC will retain 45.46% equity in the Project SPV;

· To acquire its interest in the Project SPV, Kibo will contribute £3 million, subject to securing such funding, to be paid as an equity subscription to acquire shares in the Project SPV;

· Kibo will have the option to provide additional convertible shareholder loan facilities to the Project SPV and/or convert future project development fees into further equity in the Project;

· Project rights, held by Haverton, include all technology licence agreements, all equipment supply and maintenance agreements with EQTEC and all rights to the site under the existing agreements with Scott Bros. Enterprises Limited;

· Following the completion of the transaction, EQTEC will invoice for its project development services to the SPV; and

· EQTEC will remain as the lead development manager on the Project, providing the design and core Advanced Gasification Technology and retaining the maintenance portion of the O&M contract upon commissioning.

Further announcements regarding the finalisation of binding transaction documentation will be made in due course.

David Palumbo, CEO of EQTEC, commented:

"In the UK, our focus is on developing and commissioning the country's first three commercially-successful gasification plants which will convert local municipal waste into clean energy for local communities.

"We are delighted to have Kibo as proposed joint investor and developer in one of these projects, the Billingham RDF-to-energy project. Their confidence in the potential that this plant has for the local area, their commitment to investing in clean energy projects and technologies, and our shared approach to how large infrastructure projects like this should be successfully project managed, will ensure our skillsets are combined to best achieve the objectives for Billingham. We also believe that this partnership with Kibo could evolve and expand into other projects and markets.

"We know there is a better, cleaner and more efficient way to use the municipal waste and convert it into value, sustainably, rather than sending it to be incinerated or buried at landfill sites. We look forward to driving this project forward towards achieving that goal."

Louis Coetzee, CEO of Kibo, commented:

"Kibo's commitment to the EQTEC project in Billingham is clear and marks a key milestone in our new corporate strategy to solely invest in commercially-sound, sustainable clean energy projects. Our present focus is primarily on projects in the UK and Africa that will realise their value in the near term, within 18-months. We are very pleased to have joined forces with leading player EQTEC to invest in and develop this plant further, and additionally see potential for us to roll out its Advanced Gasification Technology to our Africa projects and the Africa market in the future. The acquisition aligns perfectly with Kibo's existing corporate strategy and more specifically with our current UK project focus. The Company is also very pleased with the progress it has already made to secure the funding required for this transaction."

Further information about the Project

This announcement follows a number of updates made by the Company in respect of the Project. Most recently, as announced on 19 July 2021, the project development and associated engineering work, led by an EQTEC team, had produced a detailed design for the core gasification process and equipment and a concept design for the full plant. In July, reviews with potential funders, including Kibo, were held as planned and the project team is currently selecting delivery partners, including Tier 1 EPC companies.

EQTEC has already secured a grid connection offer for the Project and completed technical due diligence with technology insurance providers and Haverton WTV Limited had previously signed a conditional Land Purchase Agreement for the land on which the proposed plant will be constructed and operate. The Project has existing planning permission for advanced thermal conversion and EQTEC's revised planning approval both improves the economics of the Project and reduces the size of the footprint of the plant.

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.

ENQUIRIES

About EQTEC plc

As one of the world's most experienced gasification technology and engineering companies, with a growing track record of delivering operational and commercial success for transforming waste-to-energy through best-in-class technology innovation, engineering and project development, EQTEC brings together design innovation, project delivery discipline and solid commercial experience to add momentum to the global energy transition. EQTEC's proven, proprietary and patented technology is at the centre of clean energy projects, sourcing local waste, championing local businesses, creating local jobs and supporting the transition to localised, decentralised and resilient energy systems.

EQTEC designs, supplies and builds advanced gasification facilities in the UK, EU and US, with highly efficient equipment that is modular and scalable from 1MW to 30MW. EQTEC's versatile solutions process over 50 varieties of feedstock, including forestry wood waste, vegetation and other agricultural waste from farmers, industrial waste and sludge from factories and municipal waste, all with no hazardous or toxic emissions. EQTEC's solutions produce a pure, high-quality synthesis gas ("syngas") that can be used for the widest range of applications, including the generation of electricity and heat, production of synthetic natural gas (through methanation) or biofuels (through Fischer-Tropsch, gas-to-liquid processing) and reforming of hydrogen.

EQTEC's technology integration capabilities enable the Group to lead collaborative ecosystems of qualified partners and to build sustainable waste reduction and green energy infrastructure around the world.

The Company is quoted on AIM (ticker: EQT) and the London Stock Exchange has awarded EQTEC the Green Economy Mark, which recognises listed companies with 50% or more of revenues from environmental/green solutions.

Further information on the Company can be found at www.eqtec.com.