Ireland-headed biomass and waste gasification technology developers EQTEC plc has announced that North Fork Community Power LLC (NFCP), a 2 MWe biomass power plant project in North Fork, California (CA) has reached a financial close.
According to a statement, the financial close of the proposed construction and operation of a 2MWe biomass plant by North Fork Community Power LLC (NFCP) has been finalised and was signed on December 31, 2019. Accordingly, the equipment sale and services contract, originally announced on September 3, 2019, has now also been executed.
EQTEC co-operated closely with its partner in California, Phoenix Biomass Energy Inc. (Phoenix Energy), which is also a shareholder in NFCP, to achieve financial close on the project.
Reaching financial close on our North Fork Project is a crucial milestone for us. We have been working on this project for a number of years and faced many challenges. The partnership established with EQTEC has been instrumental to get us here. We will use the experience and network gained in the process to show that no other group is better placed to provide the solutions required by the state of California to address its forestry wood waste problem. Our team can now focus on the next two projects in our pipeline. The second will be self-funded and we have already initiated conversations with our funders for our third project. We face 2020 with a renewed enthusiasm and confidence that we could make a real difference for our environment and society, said Gregory Stangl, CEO of Phoenix Energy.
Acquire a stake
Under the contract, EQTEC will invoice NFCP a total of EUR 2.2 million for the sale of equipment and the supply of engineering and design services. On commissioning, which is expected before the end of Q1 2021, 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.
On June 4, 2019, EQTEC also announced that it had entered into a legally binding agreement to acquire a 19.99 percent interest in NFCP on the financial close of the project and this acquisition has now been completed.
The consideration for the investment is being solely satisfied by the supply of certain items of the existing equipment currently held at EQTEC’s Newry site in Ireland, valued at US$2.5 million, and no cash consideration is therefore required.
We are delighted that together with Phoenix Energy we have now achieved financial close with North Fork. Despite facing challenges outside our control in the financial closing process, both teams worked relentlessly and creatively to achieve financial close by the year-end as was required. We see the funding of our first project in the US as an important milestone to attract funding for the rest of the Phoenix project pipeline and we believe the relationship will develop beyond the next four projects which are currently under exclusivity. We believe that there will be many more opportunities in California arising from the need to address the current critical situation facing the state with regards to forestry wood waste. We further believe that our partnership will provide further benefits going forward as we continue to implement our clear growth strategy in converting biomass into clean energy in the US, said David Palumbo, CEO of EQTEC.