Further details emerged today of a proposed deal allowing energy-from-waste pioneers Central energy to launch their future joint venture in Poland.
Under general conditions agreed with the partners Hydrogen Utopia Internationalthe Merseyside-based company will build and operate an energy capture plant in Konin, Wielkopolska, a province in the center of the country.
The duo believe there are synergies between their technologies, which focus on extracting low-carbon hydrogen from end-of-life plastics and waste previously thought to be unrecoverable.
Today’s announcement to investors provides details of an emerging relationship that the companies say can deliver large-scale carbon-free hydrogen for industrial and trucking use across Europe.
With grants from the European Commission, the Konin plant aims to convert 1 million tonnes a year of end-of-life waste into hydrogen, providing new jobs for some of the country’s 78,000 coal miners.
The development costs of the new joint venture will be covered equally. Under the terms and conditions, Powerhouse will not make any entry payments to HUI, but HUI will be allowed to recover at financial close of the project, its costs to date set at €250,000, with a premium of €250,000.
Both parties intend that the development costs incurred by each will be capitalized at financial close and recovered through an appropriate mechanism, to be agreed upon.
PHE’s participation in the new joint venture is subject to a new definitive agreement, including on the management and governance of the JVCo.
Last month the partners signed contracts to develop a second factory at Lanespark in County Tipperary.
As part of the deal, Powerhouse has agreed to pay Alexandra Binkowska and Guy Peter’s Hydrogen Utopia up to £1m, 60% of which is in the form of a loan, to set up a joint venture. Subject to a lease being finalized, the development of Lanespark and the marketing of its clean hydrogen would then be delivered 50/50.
Powerhouse’s forays overseas build on a strategy overhaul launched last year by a new management team led by CEO Paul Drennan-Durose, pictured.
Commenting on this morning’s clarification, Powerhouse Energy Acting Chairman Keith Riley said:
“This formalizes Powerhouse Energy’s position in the Konin project and ends market speculation as to our role.
“We now have the task of agreeing detailed documents for the three projects at Protos, Lanespark and Konin, which will conclude PHE’s recently adopted policy of having at least some level of control over the projects it embarks on.
“I am well aware that this increases our cash flow, so an important aspect of the project controls we are implementing is careful cash management and expense control which we have built into the management forecast. HUI has made a fast start in Poland and announced to have signed a letter of intent with the city of Konin on February 3, 2021.
“Events in Eastern Europe since, however, inevitably mean that this project is in danger of falling behind schedule. Accordingly, I am confident that all three developments can be scaled.
Market reaction to this morning’s announcement saw Powerhouse shares fall more than 4% mid-morning.