Eqtec Regulatory News (EQT)

21 June 2021

EQTEC plc

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

Financial Close of Italia MDC Project and signing of Equipment Sale and Services Contract

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, further to its announcement of 17 May 2021 relating to the acquisition and planned recommissioning of the 1MWe EQTEC Italia MDC plant (the "Project"), the binding legal documentation for financial close (the "Investment Agreement") was signed on 18 June 2021.

A consortium of co-investors, consisting of the Company, an Irish Family Office, an Italian Family Office and MetalNRG plc ("Metal NRG"), (together the "Parties"), recently formalised the intention to recommission the 1 MWe biomass-to-energy plant in Tuscany, Italy. Built around EQTEC technology, EQTEC Italia MDC will transform straw and forestry wood waste sustainably sourced from local farms and forests into green electricity and heat for the local community. 

The Project in Italy will be the first of the Company's 'Market Development Centres' (the "MDCs"), including one to follow in Croatia that will showcase EQTEC's technology in a fully operational, commercial setting. The Italy and Croatia MDCs already contain EQTEC's Advanced Gasification Technology, having been decommissioned by previous owner-operators in recent years.

Highlights:

· Leading the consortium, the Company, together with an Irish Family Office, an Italian Family Office and MetalNRG plc ("Metal NRG") are participating in the Special Purpose Vehicle ("SPV"), named EQTEC Italia MDC Srl;

· The Parties, excluding the Company, have jointly committed to and have now paid an aggregate €2.1m for an 80% equity interest, with the Company holding the remaining 20% equity interest in the SPV for a capital contribution of €482,000;

· As part of the Investment Agreement, the equipment sale and engineering upgrade contract between the Company and the SPV has also been executed, specifying EQTEC's role in the supply of technology and design and construction support services for the Plant at a total value of €1,750,000;

· In addition to being co-owner, developer and Advanced Gasification Technology supplier to the Plant, EQTEC has been contracted as the O&M partner for the fully commissioned Plant. The O&M contract value for the Company is expected to be approximately €215,000 per annum;

· Once the Plant is operational, currently expected by Q2 2022, EQTEC Italia MDC Srl is expected to generate annual revenues of c. €2,000,000 and EBITDA of c. €750,000; and

· The Company has a call option to acquire some or all of the remaining equity in the Project at a fixed price for the first two years from the date of financial close. The other investors have a put option to sell some or all of their equity in the Project to the Company at a fixed price for the first two years of operations. Both the call and put options are set at a fixed return on the capitalisation amount.

David Palumbo, CEO of EQTEC, commented:

"Last month's £16m fundraising result was specifically designed to enhance EQTEC's capabilities and capacity to accelerate our growth strategy for 2021 and beyond. EQTEC Italia MDC is a clear indication of that acceleration. Our strong, partner-led model enables us to progress more confidently through the milestones of our sustainable waste-to-energy plants. Reaching financial close with Italia MDC is another step for us in establishing our presence across more of Europe, first in Italy and soon in Croatia."

Further information about the Project

The Plant is due to be fully recommissioned and operational by Q2 2022, with connection to Italy's national electric grid already in place. The Company estimates that the Plant will generate an unlevered IRR of 20% and annual EBITDA in excess of €750,000. The EPC contractor for the Project will be COS.M.I. Srl ("COSMI"), EQTEC's Italian delivery partner and a company with successful experience in building EQTEC plants. COSMI is expected to commence its role when all remaining permissions and advanced gasification equipment are fully in place.

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.

Existing EQTEC plants and sustainable waste-to-energy market opportunities

To date, four commercial plants and two R&D facilities have been built with EQTEC's Advanced Gasification Technology, in Spain, Croatia, Italy, Bulgaria and France. The longest-standing commercial facility, built in 2011 for Spanish agro-business, Movialsa, has operated for over 125,000 independently audited engine hours, receiving written commendation from leading gas engine company Jenbacher, with reference to the purity, consistency and efficiency of the syngas produced by EQTEC's gasification technology.