- Proposed Joint Venture with Peel at Protos Energy Park.
Powerhouse Energy Group PLC (AIM: PHE), the pioneering integrated technology company which converts non-recyclable waste into low carbon energy, announced on 15 August 2022 that the Company was taking a 50% shareholding in Protos Plastics to Hydrogen No 1 Ltd. The Company is pleased to announce that it has now agreed variations to existing agreements with Peel NRE Ltd as follows:
Collaboration Agreement
Collaboration Agreement dated 9 August 2019 made between (1) Peel Environmental Limited (2) Waste2Tricity Limited (3) Waste2Tricity (Protos) Limited and (4) Powerhouse Energy Group Plc as amended by a letter dated 29 October 2021 – this agreement has been extended until 31 March 2023.
The Collaboration Agreement was signed in August 2019 and establishes the formal relationship between PHE and Peel to develop a project using PHE’s DMG Technology on the Protos site. It commits the counterparties to seeking funding for the initial development and working together on 10 further projects. It also commits the counterparties to exclusivity and “non-compete” and mutual confidentiality during the Collaboration Period.
Option for Exclusivity
Option for Exclusivity dated 6 March 2020 in respect of the development and deployment of Distributed Modular Gasification technology – a deed of variation has been signed extending the Option End Date to 31 March 2023.
Under this agreement, PHE granted Peel an option to enter into an Exclusivity Agreement with PHE in consideration of a payment to PHE of £500,000, superseding relevant terms set out in the Collaboration Agreement. The Option period commenced on PHE agreeing to acquire the entire shareholding of Waste2Tricity Ltd. If exercised, the Option will give Peel the exclusive right to develop, distribute, promote, and operate DMG Technology in the United Kingdom. It does not, however, prevent PHE from carrying out business unrelated to DMG Technology, provided it does not compete for the same plastic feedstock required by an existing or contemplated project of Peel. It also anticipates the parties entering into a Service Agreement with provision for an annual licence fee of £500,000 per annum (indexed) to be paid to PHE. The Service Agreement was entered into on 30 June 2021.
Loan Facility Agreement
Loan Facility Agreement with Protos Plastics to Hydrogen No1 Limited – the loan facility has been extended until 31 March 2023.
The Loan Facility Agreement was signed on 11 May 2021, providing the Peel special purpose vehicle for the Protos plastics to hydrogen project (the ‘Project’) with the ability to draw down funds from PHE up to the sum of £3,800,000. The loan is be repaid on the date of the Final Investment Decision of the project and carries a coupon of 2% above Base Rate. The loan is secured by a step-in on the lease of the Project site. The sums drawn down can only be made against a development cash flow schedule listing prescribed activities and costs related to development of the Project.
All other terms and conditions remain unchanged.
Keith Riley, Interim Chairman and Acting CEO of PHE commented:
“This facilitates PHE taking the shareholding in the Protos plastics-to-hydrogen project. PHE looks forward to working closely with Peel to bring the project to fruition and providing further updates in due course.”
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