31 October 2013
AFC Energy plc
("AFC Energy", "AFC" or the "Company")
£1.2 million Thai commercialisation agreement with Waste2Tricity
AFC Energy plc (AIM: AFC), a fuel cell energy developer for industry, is pleased to announce that on 30 October 2013 it entered into a commercialisation agreement (the "Agreement") with Waste2Tricity International (Thailand) Ltd ("W2T Thailand"), a majority owned subsidiary of Waste2Tricity Ltd ("W2T"), which grants W2T Thailand with exclusive long term rights for the application of AFC's technology to the waste-to-energy market in Thailand. The Agreement builds on a commercialisation deal for the UK market announced in April 2012 whereby W2T would promote and develop projects involving the integration of the Company's fuel cell products with hydrogen derived from the gasification of municipal solid waste to generate renewable energy.
The Agreement will extend AFC Energy's reach into the fast growing emerging markets of South East Asia, beginning with Thailand, where demand for electricity is forecast to grow by an estimated 4.4% per annum for the next 15 years1. Further, the volume of municipal waste generated due to rising living standards and population growth, is expected to increase by an estimated 3.5% per annum, to 20 million tonnes annually by 20222.
Under the terms of the Agreement, the Company will receive a non-refundable appointment fee of £1.2 million payable in stages over four years, as follows:
· £155,000 by 31 December 2013
· £55,000 by 31 March 2014
· £125,000 by 31 December 2015
· £185,000 by 31 December 2016
· £680,000 by 31 December 2017
W2T Thailand will be AFC Energy's exclusive agent for an initial term running until 2024 in Thailand for securing fuel cell system supply contracts from projects where waste is gasified, from which AFC Energy expects to derive further revenues. W2T Thailand will receive a commission of 33%, subject to a deduction of an amount equal to the price of all products and services supplied by AFC Energy pursuant to contracts in respect of which such commission is payable.
AFC Energy and W2T have collaborated closely since the UK agreement was signed to target and develop waste-to-energy opportunities at home and abroad. W2T was established to initiate waste-to-energy projects using the most economically viable technologies available. W2T selected AFC Energy's fuel cell systems as being potentially the most efficient technology for generating electrical power from gasified waste.
Ian Williamson, Chief Executive of AFC Energy, said: "This agreement is an excellent example of our continuing close relationship with Waste2Tricity. We have been looking at countries around the world where we expect to see the greatest return for our shareholders and waste-to-energy in Thailand shows great promise. The energy needs of the southern Asian countries are expected to continue growing rapidly in the coming years and this is an example of how AFC Energy plans to commercialise and embed its technology in key energy markets worldwide. This is not an overnight process but we are putting in the relationships and preparing for our initial projects as they are delivered by Waste2Tricity."
John Hall, Managing Director of W2T, said: "We have actively targeted and prioritised Thailand and the ASEAN economies for waste-to-energy projects over the past two years. We are now in advanced discussions with potential local partners to develop a pipeline of projects in Thailand and assess opportunities elsewhere. So today's agreement comes at an exciting time both for W2T and AFC Energy and we believe this agreement will open a significant market that will benefit both companies in the years ahead."
The Agreement constitutes a related party transaction under the AIM Rules for Companies, as the Age of Reason Foundation, which is a substantial shareholder in AFC, and its associated entities, control more than 30% of W2T. The Directors of AFC, having consulted with the Company's nominated adviser, Allenby Capital Limited, consider that the terms of the Agreement are fair and reasonable insofar as the shareholders of AFC Energy are concerned.
For further information, please contact:
AFC Energy plc Ian Williamson, Chief Executive Jane Dumeresque, Finance Director |
+44 (0)1483 276726 |
Luther Pendragon -PR advisers to AFC Energy Neil Thapar, Alexis Gore and James Foster |
+44 (0)20 7618 9100 |
Peat & Co. - Corporate Broker Charlie Peat |
+44 (0)20 7104 2334 |
Allenby Capital - Nominated Adviser Jeremy Porter James Reeve |
+44 (0)20 3328 5656 |
1 Siam Commercial Bank
2 Pollution Control Dept, part of Thai Ministry of Natural Resources and Environment
About AFC Energy
Founded in 2006, AFC Energy plc is re-engineering proven alkaline fuel cell technology to reduce the cost of electricity. Alkaline fuel cells have been used on US and Russian manned space missions for decades to provide electrical power and drinking water. By using platinum free, advanced materials, design tools and manufacturing processes at scale, AFC Energy is developing fuel cells that will compete with conventional technologies such as turbines for electrical power generation. Today, AFC Energy is pursuing opportunities in several sectors where hydrogen is readily available including the chlorine, clean coal and waste-to-energy industries as well as applications for distributed/back-up power. For further information, please visit our website: www.afcenergy.com.
About fuel cells
A fuel cell is a device that produces electricity, heat and water by reacting a hydrogen-rich fuel with oxygen. Conventional engines and turbines combust fuel to produce mechanical energy prior to generating electricity. The direct generation of electricity allows fuel cells to be highly energy efficient. There are several different types of fuel cell, each with its own characteristic but they are all based around a common central design. Fuel cells are increasingly being deployed for applications ranging from vehicles, domestic boilers, powering portable equipment and large scale power stations.
About Waste2Tricity
Waste2Tricity is a British venture established to implement the most efficient energy conversion process available - by implementing a unique combination of AFC Energy's new generation alkaline fuel cells with Alter NRG's plasma gasification and other existing proven technologies. The system will therefore have significant environmental and cost benefits over other methods of electricity generation. Waste2Tricity are Alter NRG's sales representative in the UK for waste derived applications of this technology. For more information, visit Waste2Tricity at www.waste2tricity.com.
