Powerhouse enters loan agreement with Protos special purpose vehicle
Waste plastic-to-hydrogen technology company Powerhouse Energy has agreed to enter into a loan agreement to provide up to £3.8m to ‘Protos Plastics to Hydrogen No. 1 Limited, the Peel NRE special purpose vehicle, it announced on Wednesday.
The AIM-traded firm said the loan was to progress the development of the Protos plant, which would be the first proposed commercial application of its ‘DMG’ waste plastic-to-hydrogen technology, licensed to the Peel NRE special purpose vehicle.
Peel NRE is a member of infrastructure, transport and real estate investment company, the Peel Group.
Under the agreement, Powerhouse would provide a loan facility of up to £3.8m to secure long-lead time items and project design services for the Protos project, prior to securing long-term debt funding arrangements via Peel NRE.
The facility would be available for six months, with drawdown to be in agreement with the budgeted Protos development cash flow.
It would be repaid following the final investment decision, or on the second anniversary of the loan, whichever fell earlier.
The loan was set at the Bank of England base rate plus 2% per annum, and will accrue interest daily.
Any drawn amount would be secured on all of the issued share capital of the special purpose vehicle, its land lease, the design, and any procured assets.
The loan followed the sanctioning of the project by the Powerhouse board, and would supplement the existing Peel NRE project investment which would be transferred into the special purpose vehicle.
Powerhouse said the project would use the proceeds of the loan to commit to the procurement of items including the thermal conversion chamber, the syngas process module, and the compression and power generation modules.
The procurement packages followed the Peel commercial review of the facility, with the design refined to optimise the supply, mix and use of waste material feedstocks for the site in addition to the provision of options for hydrogen export.
Completion of the Protos plant remained Powerhouse’s top priority, the board said, adding that it believed the provision of the loan would protect the project development schedule and facilitate the finalisation of the special purpose vehicle agreements.
“Powerhouse is now putting its money where its mouth is,” said executive chairman Tim Yeo.
“The joint Peel NRE-Powerhouse technical delivery team have done a fantastic job in aligning the chosen suppliers to meet the specification for DMG.”
Yeo said Powerhouse was confident that the loan facility had the “great benefit” of protecting the delivery schedule for Protos.
“The plant is modular and the majority of our project fabrication activities are covered in these contracts.”
At 1123 BST, shares in Powerhouse Energy Group were up 6.04% at 5.09p.