Drawdown of Bank Refinance Approved for Italy MDC

Drawdown of Bank Refinance Approved for Italy

EQTEC plc (AIM: EQT), a global technology innovator powering distributed, decarbonised, new energy infrastructure through its waste-to-value solutions for hydrogen, biofuels, and energy generation, is pleased to confirm that Banca del Fucino S.p.A., a historic private banking group based in Rome, (the "Lender") has approved the Company's drawdown of a loan facility of €2.9 million announced by the Company on 4 September 2023 (the "Facility") (the "Approval").

The Facility will provide financing for EQTEC Italia MDC Srl ("Italia MDC"), which owns the Italy Market Development Centre, located in Gallina, near Castiglione d'Orcia, Tuscany, Italy (the "Plant"). As announced by the Company on 21 December 2023, Italia MDC has completed a series of operational performance improvements and achieved the performance criteria set by the Lender. The Approval has been confirmed following the Lender's visit to the Plant on 10 January 2024, at which it was accompanied by Italia MDC staff and shareholders, including the Company.

As previously announced, the term of the Facility is 48 months, with an annual interest rate of 2.5% over the six-month Euro Interbank Offered Rate (Euribor), which is currently c. 3.9%. The loan is guaranteed up to 80% by MedioCredito Centrale S.p.A., which is controlled by the Italian Ministry of Economy.

Italia MDC intends to draw down the Facility in full imminently to support the Plant's business plan and to fund additional performance improvements as Italia MDC pursues further operational efficiency and commercial opportunities. Part of the Facility will also be applied towards repayment of shareholder loans that have funded the project to date, including part of the c €2.6 million loans made by the Company.

The Plant became operational in March 2023 and EQTEC completed handover protocols and transfer of plant operations to Italia MDC in June 2023.

David Palumbo, CEO of EQTEC, commented:

"We are delighted to have achieved this significant milestone with Italia MDC. The whole team at EQTEC and Italia MDC have worked relentlessly, aligning technical, operational and commercial activities to achieve the outcome milestone. The financing by Banca del Fucino, a traditional, primary lender, indicates their confidence in our business proposition and underlines their investment strategy toward new energy solutions and supporting innovation. We remain committed to making Italia MDC a showcase of local capability , with new energy infrastructure in Italy and a demonstration of EQTEC syngas technology in a live, efficient and sustainable business."

EQTEC Italia MDC Srl ("Italia MDC") is a company registered in Italy for the purpose of transforming agricultural and forestry waste into electrical power and biochar in a relatively remote and heaviliy agrarian community. The Company currently owns 49.0% of Italia MDC, with an option to acquire further equity in future.

Italia MDC owns and operates a 1 MWe plant in Gallina (the "Plant"), a village near Castiglione d'Orcia in Tuscany's Val d'Orcia, an area considered to be the region's most scenic. It is on a site originally owned by Toscana Cereali Societa' Cooperativa Agricola, from whom Italia MDC is currently leasing and with whom Italia MDC have agreed to purchase the land by 30 July 2024. With EQTEC technology at its core, the Plant is capable of converting multiple types of biomass feedstock into electrical power and thermal energy.

Initially, the Plant is converting higher-density wood waste into electrical power for export to the national grid, for which a connection has been secured with a preferential tariff. In addition to the electricity, the Plant is producing biochar for purchase by two European wholesalers of the product. Thermal energy produced through the continuous EQTEC thermochemical conversion process is being recycled to dry the feedstock, improving the Plant's waste-to-energy conversion efficiency.

Feedstock is being delivered by multiple suppliers, and Italia MDC has identified additional, potential suppliers in order to maintain continuity of supply and leverage over cost and availability. Further, the Plant has been upgraded to support lower-density feedstocks such as straw or other agricultural waste. This ability to switch amongst feedstock types and suppliers adds resilience to Italia MDC's business model.

About Market Development Centres (MDCs)

MDCs are reference plants that demonstrate EQTEC technology in live, commercial environments, with application of EQTEC's versatile syngas to one of four, target solution models: Industrial; Utility; Municipal; or Agricultural. The Italia MDC is focused on the Agricultural solution model, which demonstrates the potential for smaller-scale, autonomous plants in remote areas to convert agricultural and forestry biomass into value for the local community.

The Company has accommodated a number of visits to Italia MDC by prospective investors and partners, since March, and has already scheduled a number of further such visits, including with top-tier utilities companies, infrastructure investors and a consortium of private investors with whom the Company is in discussions towards funding and sale of equity in Croatia MDC.

The Company is targeting launch of the Croatia MDC later this year in Belišće, Croatia, to demonstrate the Industrial solution model, converting industrial waste from a nearby paper mill into electrical power and biochar, returning the former to the paper mill and selling the latter on the open market.

A third MDC is being pursued in eastern France that would demonstrate the Utility solution model, helping utility companies decarbonise their plant footprints and create new energy infrastructure for new lines of business in a post-fossil fuel world. The France MDC is expected to become operational in 2024.

About EQTEC plc

Further information on the Company can be found at www.eqtec.com.