AFC Energy plc (AIM: AFC), the industrial fuel cell power company, is pleased to announce that it has signed a Heads of Agreement with DNR Industries Ltd., part of the leading Dubai-based investment and project developer, Dutco Group of Companies (“Dutco”) to jointly fund and develop a business plan for the large-scale deployment of AFC’s fuel cells across the Middle East.
The business plan will focus on defining a commercial strategy for what is expected to be a significant commercial fuel cell deployment opportunity, and pending the outcome of the business plan, is anticipated to result in the formation of a joint venture between the two companies to execute the plan commencing in the first half of 2016.
The joint venture between AFC and Dutco, is expected to cover the deployment of AFC’s fuel cell across the United Arab Emirates, Kingdom of Bahrain, Kingdom of Saudi Arabia, Sultanate of Oman, Qatar and Kuwait. Based on initial estimates from market soundings already undertaken in the region individually and collectively by AFC and Dutco over recent months, this could present an opportunity on its own to deliver a large percentage of, if not in excess of, AFC’s stated target for 1GW of fuel cell development by the end of 2020.
The business plan will also explore potential commercial models for the joint venture between the two companies with a long-term strategic view being taken regarding the prospect for a regional power utility.
Dutco has a long history of successful investment and project development across the Gulf region, and internationally, covering construction, oil and gas, hotels and hospitality and natural resources, and has successfully delivered a number of the region’s largest infrastructure projects.
Mr Adam Bond, AFC’s Chief Executive Officer, said: “I have long considered the Middle East to present AFC with an enormous near-term opportunity to deploy the Company’s alkaline fuel cell technology into the growing clean energy portfolio of projects being supported in the region. The potential to work in collaboration with a group with the regional stature as Dutco presents a significant opportunity to not only leverage highly complementary skills sets and characteristics of the two companies, but also create a sizeable business platform for the deployment of the AFC fuel cell on an unprecedented scale.”
Mr Bond further commented: “Dutco and AFC are already in dialogue with several of the Middle East’s largest energy and utility groups to assess the opportunity for not only the supply of clean power to the region, but also significant quantities of clean water and to date, we believe the business potential for the AFC fuel cell in this region is one of the largest in the world. We look forward to further developing this business plan with Dutco over the coming weeks and start creating the basis of a long-term, sustainable energy and water business across the Middle East.”