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AFC Energy Plc (AFC)

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Tuesday 10 March, 2015

AFC Energy Plc

50MW Project Development Agreement in South Korea

RNS Number : 9693G
AFC Energy Plc
10 March 2015

10 March 2015



AFC Energy PLC

("AFC" or the "Company")



AFC Signs Milestone 50MW Deal with Samyoung and Changshin for the Commercial Deployment of Fuel Cell Technology in South Korea   


AFC Energy plc (AFC.L), the industrial fuel cell power company, is pleased to announce that it has signed a formal Project Development Agreement ("PDA") with two South Korean partners: Samyoung Corporation ("Samyoung") and Changshin Chemical Co. ("Changshin") for the deployment of an initial 50MW of fuel cell generation capacity in Daesan, Korea.  




·    50MW of installed fuel cell capacity across two phases

·    Expected revenue of approx. US$1bn 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)

·    Joint venture between the three companies with indicative participating equity interests of: AFC Energy (40%); Samyoung (45%); Changshin (15%)


This landmark deal confirms AFC Energy's transition from research and development to a global energy company working in collaboration with two of South Korea's most reputable companies.    


South Korea's strong incentives in the deployment of fuel cell technologies has brought significant investment and employment opportunities to the Daesan region, which AFC Energy is proud to support.


Assuming a gross output of 50MW from the fuel cell park, the joint venture is expected to generate revenues from the sale of electricity and Renewable Energy Certificates (RECs) over a 10 year period of just under US$1bn. 


The project reflects the start of a partnership between the three companies, which is expected to see multiple projects developed beyond this first project.  Negotiation of the suite of project agreements is expected to commence immediately having now established the framework principles for collaboration within the Joint Development Agreement. The exact details of the investment each party will make in support of the joint venture is still subject to negotiation but it is expected that each party will make an upfront contribution, either in cash or in kind. The parties also intend to secure project finance for the joint venture. The parties are set to commence development of a feasibility study for the project to establish the basis of design and economic analysis in support of a more detailed project engineering assessment, further details of which will be supplied in due course. 


It is proposed 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.  Between Samyoung, which will manage the development of the project as Engineering Procurement and Construction and permitting of the 50MW project, and Changshin, which will supply hydrogen, land and logistical support on site, and AFC, the partnership creates an environment, which will drive a successful and profitable enterprise in the execution of this project. 


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 commercialisation 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 honoured 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."  


For further information, please contact:

AFC Energy plc

Adam Bond (Chief Executive Officer)



+44 (0) 20 3697 1209

AFC Energy representative in Korea

Jonathan Cleave

[email protected]


+82 10 8991 2411

Zeus Capital Limited - Nominated Adviser and Joint Broker

John Depasquale, John Treacy                      

Alex Davies, John Goold  



+44 (0) 20 7533 7727


M C Peat & Co LLP - Joint Broker

Charlie Peat


+44 (0) 20 7104 2334

Lionsgate Communications - Public Relations

Jonathan Charles, Rachel Rigby



+44 (0) 20 3697 1209


About AFC Energy


AFC Energy plc is fast approaching commercialisation for its proven low-cost alkaline fuel cell system ("KORE"), which converts hydrogen into 'clean' electricity. AFC's key project POWER-UP will demonstrate the world's largest alkaline fuel cell system at Air Products' industrial gas plant in Stade, Germany. The date for the demonstration of the 240kW KORE system has been fast tracked to December 2015, representing the final phase of AFC's pre-commercialisation technical development programme and creating the platform for the Company's global commercial fuel cell deployment. For further information, please visit our website:


About Samyoung Corporation


Samyoung Corporation is one of South Korea's leading Engineering, Procurement and Construction (EPC) organisations.  With contracts in 2013 amounting to $230m, the company specialises in EPC for electrical integration of nuclear and conventional power plants, industrial plants and power transmission and distribution.  The company set up a new business unit over a year ago to investigate the potential for Samyoung entering the new and renewable energy business.  For further information, please visit our website:


About Changshin Chemical Co.


Changshin is a specialist South Koreans gas company.  Its primary business is in CO2 but it is aggressively growing its South Korean hydrogen business.  It has two sites for hydrogen supply with the primary site located in Daesan where it sources hydrogen from Lotte Chemical.  For further information, please visit our website:





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