Joint Development Agreement Signed

RNS Number : 9096W

Oracle Power PLC

16 December 2019

 

16 December 2019



Oracle Power PLC

("Oracle", the "Company" or the "Group")

Joint Development Agreement Signed with the Private Office H.H. Sheikh Ahmed Dalmook Al Maktoum and China National Coal Development Company

Oracle Power PLC (AIM:ORCP), the UK energy developer of a combined lignite coal mine and mine mouth power plant located in Block VI of the Thar desert in the south-east of the Sindh Province of Pakistan (the "Project") on Sunday 15 December 2019  entered into a Joint Development Agreement ("JDA") with the Private Office of H.H. Sheikh Ahmed Dalmook Juma Al Maktoum ("Private Office") and China National Coal Development Company Limited ("CNCDCL"), a subsidiary of China National Coal Group Corporation (collectively with Oracle, "the Parties").

This JDA follows on from the Company's announcement of 19 November 2019 detailing that the Company's flagship Thar Block VI has been included in a proposed new initiative between the governments of Pakistan and China with respect to gasification of coal into fertiliser. The Project is also enshrined within the intra-government initiatives under the China-Pakistan Economic Corridor ("CPEC"). This new initiative runs in parallel to the Company's remaining long-term plan to construct and operate a mine-mouth power plant on Thar Block VI, also included as a "Priority Project" within the CPEC. The Company believes this JDA supersedes and replaces the previous Memorandum of Understanding (dated 19 December 2018 and subsequently amended: www.londonstockexchange.com/exchange/news/market-news/market-news-detail/ORCP/14016881.html) and provides for an all-encompassing development scenario for both aspects of the aforementioned projects.

The JDA foresees the creation of a Special Purpose Vehicle to develop and undertake both projects. It is envisaged that the Project will be funded on a 75% debt and 25% equity basis, with the proposed ownership as follows:

CNCDCL                                73%

Private Office                    15%

Oracle                                   12%

Going forward the Private Office and Oracle will be responsible for, amongst other things, securing all the required permits, licenses, governmental and regulatory approvals, whilst also ensuring CNCDCL are introduced to the highest Government stakeholders, Ministries, Government agencies and departments in order to enable the Parties to jointly further advance and develop the Project.

CNCDCL will be primarily responsible for providing the required technical and commercial support in order to meet the project requirements, as well as arranging all the debt required to develop the Project. This includes applications for obtaining/granting of contracts and licenses necessary for the for the development, establishment, construction, completion, commissioning, commercial operation and maintenance of the Project.

A detailed agreement will be put in place once the Parties have finalised agreement on individual shareholdings and funding commitments.  It is envisaged that the development expenditure incurred by Oracle up to the 15 December 2019 will be capitalised.

Naheed Memon, CEO of Oracle said:

"I am delighted to now confirm and welcome our new partners, His Highness Sheikh Ahmed Dalmook Juma Al Maktoum and China Coal. I believe these two partners bring with them the requisite expertise, financial wherewithal and global presence to ensure a Project of this scale can be brought to fruition. This Project is of national significance not just for Pakistan but, we believe, also for China as part of its One Belt Initiative and inclusion in CPEC. I am honoured that our new partners share Oracle's vision and can see the truly transformational impact that the development of Thar Block VI can provide.

The outlook for Oracle has never been brighter and I look forward to updating the market on further developments as we move forward in 2020."

For further information please contact:

Oracle Power PLC Naheed Memon	[phone]
Strand Hanson Limited (Nominated Adviser) Rory Murphy, James Harris, Jack Botros	[phone]
Brandon Hill Capital Limited (Joint Broker) Oliver Stansfield Shard Capital (Joint Broker)	[phone]

Damon Heath

[phone]

The Private Office of H.H. Sheik Ahmed Dalmook Juma AL Maktoum

The Private Office is based out of the United Arab Emirates (UAE) and currently develops, owns and operates various projects in the energy and infrastructure sectors. The Private Office has multiple businesses across Africa, the Middle East and South Asia regions, including Pakistan. The Private Office brings not only direct and indirect access to capital, but a wealth of contacts and relationships which the Oracle Board believe will be highly beneficial on a project of this size and scale. For more information on the Private Office, please visit the following website: https://admoffice.ae/

China National Coal Development Company Limited

CNCDCL is a subsidiary of China National Coal Group Corp (commonly referred to as "China Coal"), one of the world's largest energy companies, employing over 130,000 people. China Coal's operating revenues in 2018 were RMB150.2 billion. The Company specialises in coal production and possesses comprehensive industry experience through the development chain including coal mine design, coal mine construction, coal mining equipment manufacturing, coal mining, washing and processing, coal chemical industry, pit-mouth power generation as well as coal and chemical products business and trade. For more information on CNCDCL and China Coal please visit the following website: www.chinacoal.com

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No 596/2014.

 

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