AFC Energy plc Signs Landmark Fuel Cell Memorandum of Understanding with the Government of Indonesia and Opens US Offices

13 Jun 2007 12:00

AFC Energy plc ("AFC Energy" or "the Company") (LSE-AIM:AFC) hasentered into a Memorandum of Understanding ("M.O.U.") with theGovernment of Indonesia, and specifically with the State Ministry forDevelopment of Disadvantaged Areas of the Republic of Indonesia. £ The M.O.U. relates to the CIUP (Community Integrated UtilityProgram) project that aims to provide 32 million households with theability to produce electricity and potable drinking water over thenext 10 years. AFC Energy has been appointed as the exclusive fuelcell supplier to this program, whether with AFC Energy proprietaryfuel cells or as an agent for third party fuel cells. £ The M.O.U. contains an initial order totaling US$13.5 million forthree thousand 3.5kW systems at US$4,500 per system. Supplies arescheduled to begin around the fourth quarter of 2008. The primarytrial of 3,000 units will be in the Nabire-Papua region. £ The M.O.U. also confirms that both parties undertake to enter intoa joint venture to establish, within 18 months, a manufacturingfacility in partnership with a number of interested Indonesiancorporations. The intention is that over the following 8 - 10 years upto six million 5kW units could be manufactured. £ A deposit of US$3.15 million will be paid within 30 days of thesigning of the M.O.U. in order to assist in financing and acceleratingthe new project. £ It is intended that AFC Energy will fund the development of themanufacturing facilities required to fulfill this project with fundsprovided by a number of high profile public and private multinationalcompanies. AFC Energy is engaged in early stage discussions withseveral parties in this respect. £ Ir. Tatag Wiranto MURP, Indonesia's Deputy Minister for theDevelopment of Disadvantaged Regions said: "We are pleased to commencethis program now that we have identified a low-cost solution to thefuel cell component of the project." £ Howard White, AFC Energy plc's Business Development director said:"We are delighted to have been chosen exclusively to supply the fuelcell component for this landmark. The project, developed by Prof. Dr.Ir. Reginald A. Theijs, Senior Advisor to the Deputy Minister forEconomic & Private Business Development, is groundbreaking in that itaddresses existing shortages of the fundamental commodities inIndonesia, electricity and potable water. £ "The program will utilize bio-mass and other renewable sources toproduce hydrogen for AFC Energy's fuel cell to convert the hydrogen toelectricity, and some of the electricity to run reverse osmosispotable water production units. £ "The program has been designed to achieve a payback period ofbetween three and five years on the installed equipment. This wouldmean that the program is financially self funding after the initialbuild up period. This project will be part of the CIUP." £ Gerard Sauer, Chief Executive, AFC Energy said: "This M.O.U. isfurther evidence of our strategy to develop and manufacture low-costhigh volume fuel cell products working well. There is ample evidencethat the market place will expand if the right commercial conditionscan be created." £ Maxi Gunawan, co-chairman of the IBBC (Indonesian British BusinessCouncil) said: "This agreement is a showcase project that embodies theideals that were expressed in the joint statement made between the UKand Indonesian Governments represented by Prime Minister Tony Blairand President Susilo Bambang Yudhoyono in enhancing bi-lateralrelationships in trade and investment." £ The feasibility of the project is only magnified by the use of nosubsidies whatsoever, again proving that AFC's ultra low costelectrode and technologies will allow for rapid commercialization andthe introduction of a new age of fuel cell technology. £ AFC Energy PLC has opened offices to explore applications in theUnited States. £ "This type of agreement supports with the call to action by GeorgeW. Bush and other world leaders to reduce global warming bytechnological advancements," says Stephanie Morgan-Fisher a VicePresident with AFC Energy Inc. "The Indonesian government will begenerating at the completion of this project 32,000 Megawatts ofelectricity without one ounce of Carbon Dioxide emitted into theatmosphere." Copyright Business Wire 2007