Ireland-headed EQTEC plc (previously REACT Energy plc), a technology solution company for biomass and waste gasification to energy projects has announced that it has signed its first agreement regarding the joint development of a biomass gasification power project in California, United States (US), with Phoenix Biomass Energy and North Fork Community Development Council (NFCDC),
Further to the framework agreement with Phoenix Biomass Energy, Inc. announced in May 2019, EQTEC has signed a legally binding agreement with Phoenix Biomass Energy and North Fork Community Development Council (NFCDC), to acquire 19.99 percent ownership of North Fork Community Power LLC (NFCP), a special purpose vehicle (SPV) formed to build and operate a 2 MW biomass project in North Fork, California.
Phoenix and NFCDC are existing shareholders and Managing Members of NFCP. The consideration for EQTEC’s investment will be solely satisfied by the supply of certain items of the existing equipment currently held at EQTEC’s Newry site, valued at US$2.5 million and no cash consideration will be required.
EQTEC also expects to invoice NFCP EUR 2.2 million, under a separate sales contract, for the sale of further equipment and the supply of engineering and design services to NFCP. The sales contract, which will involve a substantial down payment on signing together with further agreed milestone payments until commissioning, is expected to be completed and signed by the end of June 2019.
We are delighted that our framework agreement with Phoenix is already progressing at speed and creating significant value for all stakeholders. We look forward to signing the sales contract over the coming weeks and visiting the US to explore further opportunities and projects together. This transaction fits with our strategy to have diversified revenue streams and it is a major step for the company and for all shareholders, Ian Price, CEO of EQTEC.
Initial works have already commenced on site and the EPC contractor has been engaged. On commissioning the project is estimated by NFCP to have a valuation of approximately US$20 million and be capable of generating annual revenues of approximately US$4 million.
NFCP is currently building the project on the site of a former mill in North Fork, California for which it holds the lease and intends to own and operate. In addition, NFCP holds the relevant permits, power purchase agreement (PPA) and various other commercial agreements required for the development of the project.
The technology developed by EQTEC represents a repeatable, scalable solution that could have a big impact on California’s tree mortality crisis and related climate challenges. We are delighted to have a partner who shares a vision for building out a network of distributed biomass generation, commented Gregory Stangl, CEO of Phoenix.
