Charbone announces the execution of a non-binding memorandum of understanding (MOU) between its wholly-owned subsidiary, Charbone USA, and Northwoods, pursuant to which the parties will enter into discussions and negotiations regarding the acquisition by Charbone USA of the Wolf River Hydro Limited Partnership, which owns a 700 kW operating hydropower plant in Shawano, Wisconsin.
Charbone USA will complete and update its due diligence on the Tower Kleber Limited Partnership and the Black River Limited Partnership (collectively with the Wolf River Hydro Limited Partnership, the “Limited Partnerships”), consisting of a total 2,760 kW portfolio of three operating hydropower plants located in Michigan’s Onaway region.
The terms and conditions for the acquisition of each Limited Partnership will be outlined in purchase and sale agreements (the “PSAs”) that will be executed for each Limited Partnership.
The parties intend to execute a PSA and finalize the acquisition of each Limited Partnership in stages, beginning with the acquisition of the Wolf River Limited Partnership on or before November 15, 2022, and the acquisitions of the two remaining Limited Partnerships on or before December 15, 2022.
The Limited Partnerships are parties to long-term power purchase agreements (“PPAs”) with big local utilities and are anticipated to provide recurring revenues for Charbone USA beginning in Q4-2022.
Charbone’s objective is to purchase its own hydropower plants and upgrade and optimize them to boost the production and value of the assets for its shareholders, as well as to aid Charbone in the deployment of a regional center for green hydrogen.
Charbone offers its proficiency in the design and building of modular and scalable green hydrogen production plants.
Charbone believes that the real capabilities of the existing plants can be boosted through the automation and modernisation of the facilities with newer hydro turbine technology. All plants provide land space to Charbone for the construction of green hydrogen facilities.
Northwoods management and operation team have decided to continue performing their duties under Charbone ownership and will support Charbone’s engineering team in implementing optimization, modernisation, and automation initiatives at each plant. Charbone aspires to become one of the first green hydrogen producers in the Midwest.
Dave B. Gagnon, Chairman and CEO of Charbone, said: “Charbone is pursuing its original plans to acquire hydropower plants to support its green hydrogen regional hubs that will grow with the market in specific regions where we believe there is an actual industrial market for hydrogen.
“They are high quality assets that can be modernized and optimized so as to increase the value of such assets will secure a reliable and consistent revenue stream for Charbone as well as unlock good pricing baseload energy with low operating costs to produce green hydrogen.”
“Charbone’s model is unique, with its capabilities of managing low-cost renewable and reliable infrastructure energy sources. This supports Charbone in its work to prepare for the renewable energy industry transition toward local production of green hydrogen with a limited cost of transportation to the market.”
