REH.L Regulatory News (REH)

10 Aug 2007 07:00

Renewable Energy Holdings plc10 August 2007 10 August 2007 Renewable Energy Holdings plc ("REH" or "the Company") Carnegie CETO collaboration Renewable Energy Holdings plc (AIM: REH), the AIM quoted investor and operatorof proven and innovative renewable energy technologies, is pleased to announcethat the Company has today entered into an agreement ("Agreement") with CarnegieCorporation Limited ("Carnegie"), an Australian Stock Exchange (ASX) listedclean energy technology developer. Carnegie and REH have agreed to collaborate exclusively on the development andcommercial roll-out of offshore wave power projects in the Southern Hemisphere(excluding Reunion Island in the Indian Ocean) (the "Territory of Exclusivity"),using REH's proprietary CETO wave power technology. Carnegie previouslyco-funded the development of the CETO technology through its holding in SeaPowerPacific Pty Limited ("SeaPower") prior to REH acquiring SeaPower in 2005. CETO is the first wave power converter to sit on the seabed, where it is notvisible, safe from storms and ocean forces, and self contained. Unlike otherwave energy technologies that require undersea grids and costly marine qualifiedplant, CETO requires only a small diameter pipe to carry high pressure seawaterashore to either a turbine to produce electricity, or to a reverse osmosisfilter to produce fresh water. Under the terms of the Agreement, REH will, through SeaPower, continue to ownall CETO intellectual property and Carnegie will commit to fund CETO'sdevelopment through to commercialisation from 1 July 2007. This is subject toCarnegie raising the requisite funds by no later than 1 December 2007.Carnegie's liability with respect to funding will be limited to £3 million overa two year period. Commercialisation will be defined as the issue of the firstinvoice for power or water production from a CETO project. In lieu of it providing £3 million of funding for CETO's commercialisation,Carnegie will be entitled to a 90% interest in the equity of each CETOdevelopment project in the Territory of Exclusivity, with the balance of 10%being a "free carry" held by REH. Should the CETO development fundingrequirement exceed £3 million and Carnegie provide such excess funding, REH'sequity interest in each project in the Territory of Exclusivity will decrease byone percentage point for every additional £100,000 provided by Carnegie over £3million, down to a minimum REH interest of 2.5% (being a maximum interest forCarnegie of 97.5%). Similarly, if Carnegie chooses not to provide fundingbeyond the £3 million requirement, REH will have the right to provide suchadditional funding and Carnegie's equity interest in each CETO developmentproject in the Territory of Exclusivity will abate at the rate of 5% for eachincremental £100,000 of funding provided by REH subject to Carnegie's interestbeing no less than 51%. Carnegie may choose to discontinue funding of CETO's development at anytimeprior to commercialisation on providing three months' written notice to REH.This would result in the forfeit of Carnegie's exclusivity over the Territory ofExclusivity. Post-development funding, as described above, each CETO project within theTerritory of Exclusivity will be developed by a separately established SpecialPurpose Company ("SPC"). Carnegie will have exclusive rights to develop andoperate commercial sites for CETO throughout the Territory of Exclusivity.Subject to the adjustments that may be made in respect of funding requirementsdescribed above, REH will hold a 10% "free carry" in each SPC and Carnegie willhold 90%. All SPC's will pay a license fee to REH for the exclusive use of theCETO technology in the Territory of Exclusivity, which will be 2% of the totalproject capital expenditure and will be payable in advance based on an estimatewhich will be adjusted accordingly to reconcile with 2% of the actual totalcapital expenditure retrospectively following project completion. ShouldCarnegie wish to "farm out" its interest in any SPC, REH will have a firstoption over such "farm out" and, at the agreement of REH and Carnegie, otherpartners can be invited to join any SPC. Mike Proffitt, Chief Executive Officer of REH, commented: "We are very pleased indeed to have reached this agreement with Carnegie inrespect of the Southern Hemisphere, excluding Reunion Island. Carnegie has alongstanding interest in the CETO technology and we believe they are well placedto lead its roll out in this territory. Carnegie's commitment of £3 million tofund the commercialisation of CETO will allow REH to deploy its funds to otherrenewable energy projects, such as our wind power projects in Germany, Polandand Wales. "This agreement follows our recently announced proposed collaboration with EDFEnergies Nouvelles in respect of the Northern Hemisphere, including ReunionIsland, and further strengthens our belief that the CETO wave energy device canbe a global success." Enquiries: Renewable Energy Holdings plc Nabarro Wells & Co. LimitedMike Proffitt, Chief Executive Richard SwindellsTel: 01624 641199 Tel: 020 7710 7400 Redleaf Communications LimitedEmma Kane/Sam RobbinsTel: 020 7822 0200 Notes to editors: About Renewable Energy Holdings • Renewable Energy Holdings is an international company established tobe an operator of, and undertake active investment in, both proven andinnovative renewable energy technologies. • REH owns two wind farm sites in Germany. Kesfeld, a 32.5MW windfarm, is fully operational, and Kirf, a 8MW wind farm, will be fully operationalin 2007. In addition, REH is at various stages of development of further windfarm sites in Poland, Hungary and Wales. • REH owns a 1MW methane Landfill Gas Project in Powys, Wales. Thelong-term objective for this project is to increase production to 5-6MW. • CETO is REH's innovative wave power technology. It is the firstwave power converter to sit on the seabed, where it is invisible, safe fromstorms and ocean forces, and self contained. Unlike other wave energytechnologies that require undersea grids and costly marine qualified plant, CETOrequires only a small diameter pipe to carry high pressure seawater ashore toeither a turbine to produce electricity, or to a reverse osmosis filter toproduce fresh water. • In April 2007, REH secured a credit facility with Standard CharteredBank of up to €135,000,000 (c. £91.8m). • In July 2007, REH entered into a binding Memorandum of Understandingwith EDF Energies Nouvelles SA (EDF EN) regarding a Collaboration Agreementwhich will exclusively permit EDF EN to develop offshore wave power projects inthe Northern Hemisphere and at Reunion Island in the Indian Ocean using REH'sproprietary CETO wave power technology. • The Directors and executive team of REH have extensive experience inboth the conventional and renewable energy sectors, both in the UK and overseas,and through their experience have built a broad international network ofrelationships with individuals, companies, governments and lobby groups. • The Company was incorporated in the Isle of Man on 8 October 2004and listed on the London Stock Exchange's AIM Market in February 2005. • Further information can be found at www.reh-plc.com About CETO The CETO device is a proprietary technology that converts the energy of wavesinto electricity and freshwater. CETO is the first wave power converter to sit on the seabed, where it isinvisible, safe from storms and ocean forces, and self contained. Unlike otherwave energy technologies that require undersea grids and costly marine qualifiedplant, CETO requires only a small diameter pipe to carry high pressure seawaterashore to either a turbine to produce electricity, or to a reverse osmosisfilter to produce fresh water. The device consists primarily of a novel pump anchored to the seafloor anddriven by a spherical buoyant actuator that collects the wave energy andtransmits it to the pump. High pressure seawater is delivered ashore where itcan be used to drive a turbine to generate electricity or passed through areverse osmosis desalination unit to produce freshwater. One of the mainadvantages CETO has over the current generation of desalination plants is thatthe energy used to pump the seawater through the desalinator is 100% clean andrenewable as opposed to pumps driven by energy sourced from fossil-fuels. As aresult the CETO device can truly claim to produce zero-emission electricity andfreshwater. This information is provided by RNS The company news service from the London Stock Exchange