Eqtec buys Croatian waste-to-energy plant

The AIM-traded firm said the waste-to-energy plant was acquired through Synergy Projects, a joint venture with its Croatian project development partner Sense ESCO.

It said the plant, first commissioned in 2016, was built around Eqtec’s proprietary and patented ‘Advanced Gasification Technology’.

The plant would be recommissioned and repowered to convert forestry wood waste from local farms and forests into green electricity and heat for use in the local community.

Once operational, Eqtec said it was expected to become the plant's operations and maintenance contractor, making it the second of its market development centres and a showcase for its technology in a “fully-operational, commercial” setting.

The company's first market development centre, in Tuscany, Italy, was announced earlier in 2021.

Looking at the transaction, Eqtec said the joint venture signed a share purchase agreement for the acquisition and funding of the project’s special purpose vehicle.

It said that once an optimal financing structure was secured for the plant, the company would make further announcements, and local engineering, procurement and construction contractors would be vetted and chosen.

Active discussions with investors were currently underway, with a view of reaching financial close in the coming months, with the company adding that a grid connection application would be made for the plant in the second half of the year.

The plant was expected to be updated, recommissioned and repowered for operations towards the end of 2022, and was expected to produce about 1.2 MW of green electricity from 8,000 tonnes of locally-sourced wood chips and forestry waste biomass from regional forests each year.

Eqtec estimated that the plant would generate an unlevered internal rate of return of 12%, and annual EBITDA of more than €0.85m.

The contract value of Eqtec’s technology sales for the plant was expected to be €1.7m in technology and engineering upgrades.

The joint venture acquisition of the special purpose vehicle was funded by the company via a €0.55m loan and a €1.65m 10-year loan provided by a third party.

Both loans were intended to be converted into privately-placed bonds to meet local corporate requirements.

The joint venture is now wholly-owned by the company, with 20% equity to be transferred to Sense ESCO after completion and an additional 20% subject to performance milestones.

“Eqtec’s joint venture with such a capable and dependable partner as Sense ESCO provides the perfect platform for our re-entry into Croatia, re-introducing our Advanced Gasification Technology to sustainably transform biomass waste into energy for local communities,” said chief executive officer David Palumbo.

“The plant in Belišće, which will also be a market development centre, is the next of several European Union waste-to-value facilities we are developing to integrate our leading-edge technology and overseeing through commissioning into live operations.”

At 1400 BST, shares in Eqtec were up 9.23% at 1.42p.