17th Jul 2014 08:58
LONDON (Alliance News) - AFC Energy PLC Thursday said it has entered into a breakthrough deal with Daniel Inc, a fuel cell-focused power plant owner and development company in South Korea, to sell fuel cell systems to Daniel for a potential sales value of roughly USD15 million.
The industrial fuel cell power company said the deal means it will provide an initial one-megawatt fuel cell system to Daniel Inc, which is expected to be worth USD3.8 million, and there is a follow-on option for a further three-megawatt project, pushing the revenues up to USD15 million.
AFC Energy said it believes the deal represents the largest sale in revenue terms by any British fuel cell manufacturer in South Korea for a stationary system in an industrial setting. It is also the biggest deal AFC has ever won.
The company said the initial one megawatt system will be set up in stages including a long-term maintenance agreement, and a deposit of USD1.3 million is payable to AFC upon signing the formal contract and supply agreement.
AFC will install, operate and maintain its low-cost fuel-cell systems at Daniel Inc's site, and the project will benefit from South Korea's clean energy incentive program that focuses on the aggressive deployment of fuel cells by large electricity producers and users.
The deal follows an agreement announced by AFC earlier this week, in which AFC will provide five megawatts worth of fuel cell systems to major South Korean hydrogen supplier Chang Shin Chemical Co Ltd.
"South Korea is one of the world's fastest growing fuel-cell markets where US companies have traditionally made early inroads due to their long history," Chief Executive Ian Williamson said in a statement. "After entering this market less than two years ago, we have now established a significant bridgehead with strong partners and believe that this is the first of many more orders to come from this country."
AFC Energy shares were up 13% to 28.74 pence, making it the second-highest AIM All-Share riser on Thursday.
By Tom McIvor; [email protected]; @TomMcIvor1
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