LONDON, UK: EQTEC plc (AIM: EQT), a world-leading technology innovation company enabling the Net Zero Future through advanced solutions for hydrogen, biofuels, SNG and other energy production, is pleased to confirm that, further to its announcement on 20 July 2022, its wholly owned French subsidiary EQTEC France SAS (“EQTEC France“) was, on 7 September 2022, notified of final approval from France’s Ministère de l’économie, des finances et de l’industrie (“MINEFI“) to acquire the 6.5MWe waste-to-energy gasification plant in Villers-sous-Montrond, France (the “Plant”). 

On this basis, EQTEC France has launched an accelerated construction and commissioning programme to upgrade the Plant. Once operational, the Plant is expected to be France’s largest ever combined heat and power (“CHP”) gasification project, transforming c. 45,000 tonnes of mixed wood waste and refuse-derived fuel (“RDF“) for export of clean electricity to the national grid, with the option of increasing its production capacity in future. Construction is expected to commence in Q1 2023.

The Plant will become an EQTEC Market Development Centre (“MDC”) for showcasing EQTEC’s technical and commercial capabilities with mixed feedstock, including a mixture of Grade A waste wood, Grade B waste wood and RDF, and for catalysing further interest from project funders and owner-operators.

David Palumbo, CEO of EQTEC, commented: “We are excited to add France as our next MDC, alongside Italy and Croatia. The French market presents a significant and growing pipeline of opportunities for EQTEC, with potential for a network of licence distributors, contractors and other partners that support our journey toward becoming a leading innovator and licensor for Net Zero technology.

“At our core, EQTEC is a clean energy technology innovator, and our strategic focus is to make our leading-edge technology as available as possible to as many owner-operators as we can around the world. Our MDCs in target go-to-market geographies are critical to our progress. MDCs are places where prospective customers and partners can see, hear and touch EQTEC technology in a live, commercial plant and where owner-operators can witness our highly scalable solutions and consider how EQTEC can drive their future lines of business.”

David Le-Saint, EQTEC Market Lead for France, said: “The France MDC will be a showcase in France for EQTEC’s leading-edge technology, built on our track record and R&D efforts at our technology centre at the University of Lorraine. It will boost our visibility with alliance partners and our credibility with utility groups and institutional funders.

“The acquisition lifts EQTEC into a much better position to pursue project opportunities in the wake of the energy transition acceleration draft bill due out before the new session of the French Parliament in October. The draft bill aims to simplify permitting and set a new framework for the feed-in tariff on SNG from methanation.”

Acquisition highlights

·    The Plant, which originally benefitted from c. €35 million of investment, has been acquired by the Company at a nominal value, as it has been estimated that further investment of c. €30 million is required to recommission the plant utilising EQTEC’s technology.

·    Expressions of interest for the full funding required, including Letters of Intent (the “LoIs“), from institutional infrastructure investors have been received for the project. Construction is expected to commence in Q1 2023.

·    The Plant, once operational, is expected to generate in excess of €10 million in annual revenues, with further potential to improve the economics of the Plant.

·    The Plant will process and transform a mixture of c. 45,000 tonnes of wood waste and RDF sourced and prepared by Bonnefoy Group into 6.5 MWe of power for export to the national grid.

·    Pursuant to a local court ruling dated 13 July 2022 (the “Ruling“), the legal transfer was carried out of negotiated contracts and tangible assets of the previous Project SPV Synnov Déchets SAS (“Synnov“) to EQTEC France, after which EQTEC was able to commence full engineering and design works and secure all relevant, administrative authorisation and contracts toward financial close with third-party investors.

·    EQTEC France has received two LoIs from two institutional funders specialising in similar infrastructure investments; the LoIs express interest by the potential funders in providing project finance for the Plant, subject to customary due diligence.

·    The Company has received expressions of interest from two French energy companies to potentially become owner-operators, once the plant is successfully commissioned.

·    At financial close, all commercial requirements will have been addressed, including feedstock supply, long-lease agreement and agreement of a PPA tariff more favourable than that established previously by Synnov.

·    Following commissioning of the Plant, EQTEC expects to act as the technology supplier and O&M contractor.

·    Ownership of the project will be established through a new SPV to be set up in France by EQTEC France SAS.

·    Pursuant to the Ruling and the Approvals, the assets of Synnov will be transferred to EQTEC France, including the entirety of the existing plant from the feeding-in system to the grid-connected inverters, along with the existing environmental permit and associated contracts including for the feed-in tariff with EDF Obligation d’Achat (“EDF OA“); and

·    Prior to application to the courts for the Ruling, the Company carried out a preliminary technical audit and legal due diligence toward acquisition of the Plant from bankruptcy, improvement of the Plant’s business model, adaptation of the technology process and recommissioning of it.

Plant history

The Plant was originally developed by Group Bonnefoy on Bonnefoy’s stone quarry site located at Villers-sous-Montrond, near the Franco-Swiss border. The gasification plant was designed using non-EQTEC technologies but was never fully commissioned, as the previous technology did not successfully complete performance and endurance tests. The previous project SPV Synnov Déchets SAS entered bankruptcy in November 2021, after which EQTEC was approached as a potential buyer.