Pure Hydrogen Corporation (ASX: PH2) and CAC-H2 have executed a Convertible Note Funding Agreement to accelerate the production of an Emerald Hydrogen production facility at Moreton Bay, Queensland, using waste-to-hydrogen technology.
Pure Hydrogen intends to increase the Moreton Bay Hydrogen Hubs’ value by securing offtake agreements for clean fuel which will be supplied to customers in south-east Queensland from 2024.
Moreton Bay represents the initial facility in a proposed network of hydrogen energy hubs to be developed by Pure Hydrogen and CAC-H2 across Australia’s East Coast, with further sites also under consideration.
Under the terms of the agreement, Pure Hydrogen will initially fund 25% of the construction of the waste-to-hydrogen plant, at the cost of ~A$3.2m, with an option to fund a further 25% of the Project at its absolute discretion (50% total).
CAC-H2 have developed similar systems, which have converted woody biomass to hydrogen. The success of its technology was a key catalyst for Pure Hydrogen forming this joint development agreement and providing this initial funding.
Key terms of the Convertible Note include:
- Notes are to be issued in line with EPC funding requirements for an initial amount of A$3.2m (25%) with an option for a further A$3.2m.
- Interest will be payable on the notes at 12% per annum.
- Principal and interest will accrue until the loan is either paid out or converted to shares.
Pure Hydrogen Managing Director, Scott Brown said:
“This funding agreement marks an important step forward for the Moreton Bay Hydrogen Hub and has been executed within the timeline that was previously set out between the parties.”
“Pure Hydrogen looks forward to providing more updates over the course of 2023 with respect to its Hydrogen Hub development strategy, as it establishes a first-mover advantage in the production and distribution of hydrogen in the Asia-Pacific region.”
“With this funding, Pure Hydrogen is seeding what is likely to be the first of many plants located on the East Coast of Australia. We are creating a template that can be easily replicated across multiple sites and this will become evident as the year unfolds.”
“The funds will be provided in tranches over the next 12 months. Each note issued under the Convertible Loan Agreement will be secured by way of a General Security Deed and will secure the obligations of the Company for the payment of loan principal and interest and for the performance of all other obligations of the Company with respect to the notes.”
“The notes will rank above all other present and future unsecured and unsubordinated debt of the Company and all Shares and other equity securities on issue in the Company.”