AFC Energy plc has signed a formal Project Development Agreement (PDA) with two South Korean partners, Samyoung Corporation and Changshin Chemical Co., for the deployment of an initial 50MW of fuel cell generation capacity in Daesan, Korea. Highlights of the agreement include: 50MW of installed fuel cell capacity across two phases; Expected revenue of about US$1 billion for the joint venture over 10 years of operation; First phase of 5MW to be operational by end of 2016 (subject to permitting); Second phase of 45MW forecast to be operational by end of 2019 (subject to permitting); and Joint venture between the three companies with indicative participating equity interests of: AFC Energy (40%); Samyoung (45%); Changshin (15%).
South Korea's strong incentives in the deployment of fuel cell technologies have brought significant investment and employment opportunities to the Daesan region. The project reflects the start of a partnership between the three companies, which is expected to see multiple projects developed beyond this first project. It is expected that AFC Energy will sell its alkaline fuel cell equipment into the joint venture along with providing technical and operational advice to the joint venture participants. Samyoung will manage the development of the project as Engineering Procurement and Construction and permitting of the 50MW project. Changshin will supply hydrogen, land and logistical support on site.
Mr Adam Bond, AFC's Chief Executive Officer, said: "Having spent the last week in Seoul with our colleagues from Samyoung and Changshin, I am confident our new partners are strongly aligned with AFC's renewed and aggressive commercialization strategy into South Korea. With Samyoung's entrepreneurial drive and respected international EPC contracting experience spanning Europe, the Middle East, North America and Asia, together with Changshin's strong growth trajectory in South Korea, we are exceptionally well placed to succeed in this historic agreement for AFC."
Mr Dong Heum Keum, President and Chief Executive Officer of Samyoung, said: "We are privileged and honored to be involved in this exciting project with AFC Energy and Changshin which reconfirms our growing leadership position within the Korean fuel cell space. Our strong commitment to this project is demonstrated in a preparedness to inject our own funds into the success of the project."
Mr Sang Do Bae, Chairman of Changshin, said: "We are pleased to now be moving forward with an enlarged commitment to deploy hydrogen feedstock to support the generation of clean power from AFC Energy's leading alkaline fuel cell technology. Our commitment is now extended from merely a supplier of hydrogen to taking an equity position in the joint venture."
