Proposed Public-Private Partnership (PPP)...

RNS Number : 9403M

Active Energy Group PLC

12 May 2015

 



12 May 2015

Active Energy Group Plc
("Active Energy Group" or the "Group" or the "Company" or "AEG")

Proposed Public-Private Partnership (PPP) Initiative
in Ukrainian Forestry and Biomass Energy Sectors

Active Energy Group Plc (AIM: AEG.L), the London Stock Exchange AIM-listed international supplier of industrial wood chip for MDF manufacturing and Biomass for Energy (BFE) power generation, second-generation Biomass for Energy (BFE) fuel solutions and systems, and global forestry and natural resources development services, announces that on 13 May 2015 its CEO Richard Spinks will unveil the Group's proposal for a significant Public-Private Partnership (PPP) project with the Ukraine government at the New Ukraine 2015 Investment Conference in Kiev.

AEG's proposed PPP initiative, which it believes could be established under the 2010 Ukrainian legal framework for such projects, outlines the Company's innovative plans to commercialise the country's extensive timberland and forestry assets, leveraging them to develop a sustainable clean energy Ukrainian power generation industry.

Mr Spinks speech at the 'Energy Independent Ukraine' session of the conference - to an audience of senior Ukrainian and international government officials, as well as international investors and business leaders - will detail how AEG believes it could assist the country in achieving three of its key national energy objectives: implementing its Sustainable Energy Action Plans to improve energy efficiency and share of renewables in power generation; achieving compliance with the EU energy market and opening new avenues of cooperation with EU member states; and securing its power generation sources, a vital step in enabling it to attain full energy independence.

He will state that "There has never been a better time for the progressive government of Ukraine, led by President Poroshenko, to adopt the Public-Private Partnership model.  It's the essential accelerant to drive inward investment into Ukraine and will provide further evidence to the international business community that the country is 'cleaning up its act' and is open for business".

Ukraine's energy sector has suffered from years of neglect and under-funding, resulting in an aging and inefficient infrastructure and an unhealthy dependence on imports of Russian gas and foreign coal.  Renewable energy currently accounts for a mere 0.6% of the country's electricity generation capacity, compared to the EU target of producing 20% of member states' energy from renewable sources by 2020.

Under its proposed PPP initiative, Active Energy Group - whose Ukraine-based operations are the country's largest producer and exporter of processed timber products - intends to work alongside the Ukrainian government and international investment funds to accelerate the move away from the country's reliance on foreign energy imports towards a renewable energy industry based upon sustainable management and commercialisation of its forestry assets, and development of a national network of Biomass-fuelled power plants.

If the PPP proposal is accepted, AEG plans to construct and operate clean energy Biomass power plants in partnership with the Ukraine state authorities close to the forests to serve local villages, towns and cities, utilising waste wood and low-grade timber gathered from enhanced forestry operations, which would be conducted in strict accordance with international environmental guidelines and sustainable forestry management practices.

As a first step in demonstrating the viability of the PPP initiative and its positive contribution to the Ukrainian economy, environment and energy sector, Active Energy Group has proposed commencing a pilot project with the Ukraine State Agency of Forestry Resources (SAFR) to cover an initial 500,000 hectares of timberland in the country. 

Drawing upon its multinational team of timber industry professionals - who recently created a similar forestry development partnership project in Canada covering more than 250,000 hectares of lands owned by the Métis Settlements of Northern Alberta - and working alongside the existing Ukrainian forestry management personnel, the Company is proposing that it conducts a comprehensive survey of the selected standing timber resources to produce a full report on their commercial potential, which it expects would include development of on-site processing facilities, as well as harvesting and export of saw logs and processed timber products via Ukraine's Black Sea ports.

Based upon the Canadian model developed by AEG - which attracted US$300 million of investment offers in January 2015 - the Company's proposed PPP initiative would be structured to seek to relieve pressure on the Ukrainian treasury and state budget, while enabling modernisation and improvement of the country's existing forestry management resources to ensure their long-term viability and contribution to the country's economy, and propelling Ukraine's energy sector to the forefront of the global renewable energy industry.

"We believe that solar and wind power are now out of the equation,"says Mr Spinks, "hydro and Biomass are the future for the Ukrainian renewable energy industry". 

Active Energy Group's innovative PPP plan comes at a particularly significant time for Ukraine, as the country looks to the future, re-evaluates its relationship with Russia and its over-reliance on Russian gas imports, and seeks to modernise its entire economy, putting its Soviet-era past behind it and reaching out to its European neighbours.

As Ukrainian President Poroshenko recently stated, the country must not allow any single energy source to fulfil more than 30% of its energy needs.  Whilst analysts have identified that dozens of inefficient and polluting Soviet-era coal-fired power plants must close by the end of the decade, the government has neither revealed its plans to replace the energy they currently provide, nor how it intends to finance the huge investment required to develop a modern energy generation industry and transmission infrastructure.

"We understand that experts from the international energy community, the EC, EU member states and international finance institutions are preparing proposals to assist Ukraine in achieving energy independence by attracting inward investment." continues Mr Spinks "But if implemented, AEG's PPP initiative would be the first to tackle the problem head-on, with its focus on renewable clean energy Biomass power generation based on utilising the country's forestry resources."

 "Ukraine's forests are the envy of many nations - our proposed PPP seeks to maintain and improve them, while using waste material and low-grade timber to create a modern, environmentally-responsible and cutting-edge clean energy network that could help current and future generations of Ukrainians to improve their standard of living and guarantee them a reliable and independent source of heat and power".

"I believe that we can achieve all that while enhancing the country's forestry resources through investment in modern equipment and stewardship practices, generating revenues from commercialising its timber assets, creating employment in rural communities, and relieving the pressure on the country's finances through international investment and increased tax revenues".

 "It's the perfect storm… and it would also allow Ukraine to break free of its dependence on coal and gas imports from Russia and the pressure that places on its economy and population".

- ENDS -

NB: Active Energy Group will be publishing Mr Spinks presentation at the New Ukraine 2015 Investment Conference on its website at www.active-energy.com on the day of the conference - Wednesday 13^th May 2015.

NOTES TO EDITORS & CONTACT INFORMATION

ABOUT ACTIVE ENERGY GROUP PLC:

Active Energy Group Plc is a London Stock Exchange AIM-listed company (AIM: AEG.L).  Headquartered in the UK, it is a fast-expanding international business, experiencing strong growth and diversification since the current management team assumed responsibility in mid-2012.

The Group has considerable expertise across the entire timber industry supply chain - from forest to finished product. 

Its four specialist business divisions, which reflect its knowledge and experience, are focussed on providing products and services to specific global market sectors:

·   Forestry & Natural Resources Development and Management

·   Wood Chip for Medium-Density Fibreboard (MDF) Manufacturing

·   Wood Chip for Biomass for Energy (BFE) Power Generation

·   Second Generation Biomass for Energy (BFE) Fuel Solutions and Systems

Active Energy Group Plc operates from four international locations:

·   Ukraine, where it is the largest producer and exporter of wood chip for MDF manufacturing.

·   United Kingdom, where it operates a research & development facility for new BFE fuel technologies.

·   Spain, from where it sources finished wood chip for export to international customers.

·   Canada, where it has entered into a landmark joint venture - KAQUO Forestry & Natural Resources Development Corporation - with several indigenous Métis Settlements to commercialise in excess of 250,000 hectares of their lands, containing valuable forests and natural resources, including oil and gas reserves.

Ukraine and Canada, with their large forestry reserves and comprehensive road, rail and sea transport links, are ideal locations from which to source raw timber and manufacture wood chip and fuel pellets for supply to MDF producers and Biomass power plants.

In addition to its existing activities, the Group is actively developing innovative Biomass fuel solutions, converting waste wood and industrial/agricultural by-products into feedstock for clean energy power generation as a direct replacement for coal.

Active Energy Group Plc is led by a highly experienced and dedicated management team with a proven track record in the industries and regions in which it operates and from which its revenues are generated. 

The Company has grown significantly in recent years, and has established a firm foundation, excellent reputation and international customer base upon which to build for the future.

COMPANY WEBSITE:

www.active-energy.com

ENQUIRIES:

Active Energy Group Plc
Richard Spinks, Chief Executive Officer              [e-mail]           Intl.: [phone]
                                                                                                                                                                    Ukraine: [phone]

Mark Broomer, Corporate Communications    [e-mail]         Intl.: [phone]
                                                                                                                                                                    UK: [phone]

6 Hillgrove Public Relations
Richard Hillgrove                                                     [e-mail]              Office: [phone]
                                                                                                                                                                    Mobile: [phone]

John Price                                                                   [e-mail]                          Office: [phone]
                                                                                                                                                                    Mobile: [phone]

WH Ireland Ltd. (Nominated Adviser and Broker)                                                    
Chris Fielding/Mark Leonard                                                                                                               Office: [phone]

 

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