Mast Energy Developments PLC

(Incorporated in England and Wales)

(Registration Number: 12886458)

Share code on the LSE: MAST

ISIN: GB00BMBSCV12

("MED" or "the Company")

16 August 2021

Mast Energy Developments Plc ("MED" or "the Company")

MED Acquires Third Synchronous Gas-powered Standby Generation Facility

Mast Energy Developments Plc, the UK-based multi-asset operator in the rapidly growing Reserve Power market, is pleased to announce that MED has finalized and entered into a definitive Sale and Purchase Agreement ("SPA") to acquire a 100% interest in Rochdale Power Limited ("Rochdale"), a Special Purpose Vehicle ("SPV") from Balance Power Projects Limited ("Balance"), for the installation of a 4.4 MW flexible gas power project in Dig Gate Lane, Rochdale, OL 16 4NR, (the 'Installation'). 

Highlights

·    Rochdale comprises a shovel ready gas-fueled power generation plant with:

o  Current grid connection capacity of 4.4 MW, upwardly adjustable to 7.5 MW.

o  a Freehold site

o  a Grid Connection Offer

o  a Gas Connection Offer

o  planning and permitting already in-place

·    The acquisition costs of the freehold amounts to £90,000 and the property rights amount to £132,000, totalling £222,000 and will be funded from the current MED working capital budget.

·    Encora Energy Limited, MED's Owners Engineer conducted a comprehensive due diligence investigation on the Rochdale site on behalf of the Company, with an overall positive outcome.

·    Engineering, Procurement and Construction ("EPC") proposal already received from multinational Clarke Energy, the company's preferred EPC-contractor and currently in the process of optimization to incorporate planning consent discharge conditions and ground investigations.

·    Subject to issuing the notice to proceed and no external connectivity delays, commercial commissioning of the Rochdale site is expected during Q2 2022.

·    Proven and significant market demand with blue-chip off-taker already secured, inclusive of the implementation and execution of MED's desired trading and optimization strategy.

Louis Coetzee, CEO of Kibo, said: "The acquisition of this 4.4 MW gas power project will represent the third site in MED's growing portfolio of flexible power plants in the UK. With increasing supply/demand volatility, the Reserve Power market is the fastest growing energy sector in the UK and accordingly there is significant demand for flexible power projects of this kind and at increasingly attractive economics. The acquisition of the Rochdale site is the next step towards the much larger portfolio of 300 MW that MED is aiming to establish in the UK. The MED portfolio currently owned by the Company and under active development comprises 18.4 MW of which 9 MW is already in production, with a pipeline totalling a further 71 MW currently under assessment. We anticipate that the net profit stream from the Pyebridge, Bordesley and Rochdale facilities, totalling 18.4 MW, will be c. GBP 92,000 per month by Q2 2022, the time at which we expect all three sites to be fully operational and in steady state production."

"We look forward to updating the market with further developments in due course, as we continue to rapidly gain momentum in executing the MED business strategy."

MED CEO Paul Venter commented: "The acquisition of Rochdale will allow the company to reach its initial production target of c. 20 MW within the time and budget targets set out in the Company's prospectus. We are currently on schedule and within budget in terms of the development plan for all the sites under active development."

Transaction Rational

The acquisition is an important step toward solidifying MED's strategic intent to establish itself as a significant presence in the Reserve Power market, with the ultimate objective of developing a reserve power portfolio in aggregate of 300 MW generating capacity.

Installation of a 4.4 MW flexible gas power project

·  Construction Ready Project:

o Freehold site with planning and permitting in place for the installation of a 4.4 MW synchronous gas-powered standby generation facility with ancillary infrastructure.

o The installation will comprise a 1 by 4.5 MW gas reciprocating configuration, compliant with all permitting requirements. 

o Rochdale will feed its power into the local distributive network, operated by the local distribution network operator.

o Natural Gas will be delivered to the generators onsite via a connection to the local gas distribution network. The primary function of the proposed development is to provide electrical generation into the local distributive network when called upon by the National Grid. Times of generation will match times of peak demand within the local network and generation can be controlled remotely.

·  Compelling economics:

o Post-tax summation of unlevered free cash flow over project life expected at around c. £ 4.16m resulting in an estimated Internal Rate of Return ("IRR") of c. 15.22%.

·  Guaranteed income:

o Revenue will be created by selling electricity generated to blue chip off-taker in terms of existing contractual arrangements MED have in place.

·  Rapidly growing target market:

o Increasing volatility arising from structural shift from fossil fuels to renewable sources and rising spend on gas and electricity is resulting in tight capacity margins during peak times.

·  Rochdale will provide additional revenue opportunity, increasing the overall revenue stream by adding to the Bordesley project (5 MW), currently under construction and Pye Bridge 9 MW project, already in production (see RNS of 12 August 2021).

·  The acquisition of Rochdale will allow MED to:

o Solidify the creation of a strategic platform from which it can significantly accelerate the development of its project portfolio by developing multiple sites in parallel. 

o Significantly improve and enhance the commercial integrity and investment attractiveness of the MED reserve power portfolio by rapidly establishing economies of scale.

o Mitigate investment risk materially through further project diversification.

NOTE: All the financial numbers stated above remain subject to change until such time as actual production figures are available, following a suitable period of steady state operation.

Further information on the Company, including the prospectus published in conjunction with Admission, can be found on the Company's website: www.med.energy

This announcement contains inside information for the purposes of the UK version of the Market Abuse Regulation (EU No. 596/2014) as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018 ("UK MAR"). Upon the publication of this announcement, this inside information is now considered to be in the public domain.

ENDS

For further information please visit www.med.energy or contact: