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AEG gets funding for first CoalSwitch plant

28 November 2016 08:12

Active Energy has achieved certain milestones in line with its strategy to commercialise its revolutionary CoalSwitch technology.

CoalSwitch uses low value wood, timber, forestry and pulp mill/saw mill by-products to produce the world's first 'drop-in' biomass fuel that can be mixed at any ratio with coal or completely replace coal in existing unmodified coal powered fire stations globally.

The company has received a commitment for a five year unsecured loan facility of US$6m carrying interest at 8% per annum for the construction of a 35,000 tonne per annum plant in North America, which is capable of producing revenue of over US$6.3m per annum based on the Company's current projections.

No principal or interest repayments are required in the first twelve months.

Funding will be provided by Linarus FZE, a private Dubai-based investment company which is controlled by a consortium of investors who are well known to AEG.

Linarus has been a long-term supporter of AEG and has provided funding for the early-stage development of CoalSwitch, and remains committed to taking the project into commercial development.

AEG says that at the request of RMP, a major US Utility, and with funding to date provided by the Utah Department of Energy, AEG was contracted to manufacture a sample of AEG CoalSwitch pellets made using mixed wood wastes which are available in Utah.

RMP intends to replace 10% of its coal feed at one of its Utah plants with biomass and as part of RMP's fuel change protocol, AEG CoalSwitch samples underwent a ball mill test under stringent conditions. The results are understood to prove that CoalSwitch mills and behaves better than coal in every respect, demonstrating once again that the product can be used as a direct replacement for coal at a coal fired utility.

AEG chief executive Richard Spinks said: "This is a landmark moment for AEG. The funding unlocks our ability to commercialise our revolutionary and proven CoalSwitch technology and will enable us to generate meaningful revenues within the USA, which is set to be one of our core geographic markets. Additionally, we are delighted with RMP's public support for our product.

"Not only is it positive in terms of our future relationship with RMP but we anticipate that this will aid our ongoing discussions with other potential customers going forward. Due to its ability to enable coal fired power stations to meet strict green regulations without the need for expensive retrofit programmes traditionally required to accommodate biomass feedstock, we believe that CoalSwitch represents a potentially ground-breaking force in the market.

"Therefore we look forward to providing further details and timescales regarding the development of AEG CoalSwitch, which will be transformative for the Company and our customer base in the coming months."

At 8:12am: (LON:AEG) Active Energy Group share price was +0.1p at 2.85p

Story provided by StockMarketWire.com

Related Company: AEG

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