LONDON (ShareCast) - (Sharecast News) - Waste gas-to-energy technology company Eqtec announced on Thursday that the legal documentation allowing the financial close of the proposed construction and operation of a 2MW biomass plant by North Fork Community Power (NFCP) had been finalised, and was signed on 31 December.
The AIM-traded firm said that as a result, the equipment sale and services contract between the company and NFCP, originally announced on 3 September, had now also been executed.

Under the contract, the group said it would invoice a total of €2.2m to NFCP for the sale of equipment and the supply of engineering and design services.

The contract comprised a substantial down-payment of €0.88m on execution, together with certain further agreed milestone payments leading up to the commissioning of the project.

Eqtec said the group had already invoiced NFCP in respect of the €0.88m down-payment, and had received confirmation that payment of that invoice had been implemented by NFCP.

On commissioning, which was expected before the end of the first quarter of 2021, the project was estimated by NFCP to have a valuation of around $20m, and be capable of generating annual revenues of about $4m.

On 4 June, the company also announced that it had entered into a legally binding agreement to acquire a 19.99% interest in NFCP on financial close of the project, with that acquisition now completed.

The consideration for the investment was being solely satisfied by the supply of certain items of the existing equipment currently held at Eqtec's Newry site, valued at $2.5m, with no cash consideration required.

Eqtec said it "co-operated closely" with its partner in California, Phoenix Biomass Energy, which is also a shareholder in NFCP, to achieve financial close on the project.

"We are delighted that together with Phoenix Energy we have now achieved financial close with North Fork," said chief executive officer David Palumbo.

"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."

Palumbo said the company believed that there would 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."

At 1535 GMT, shares in Eqtec were up 41.3% at 0.16p.

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