Swedish Stirling signs letter of intent with a South African development bank
Swedish Stirling AB (“Swedish Stirling”) and the development bank The Industrial Development Corporation of Africa (“IDC”) has sign a letter of intent about forming a jointly owned financing/leasing company in South Africa. The new company will initially be able to finance deals in Africa for up to 100 PWR BLOK units.
The Swedish clean tech company Swedish Stirling today signed a letter of intent with South African development bank, IDC, to jointly establish a financing/leasing company in South Africa. The new company – which goes by the name “Southern Shield” – will initially be able to finance installations of up to 100 PWR BLOK units. Swedish Stirling will initially own 51 percent of Southern Shield, but its share will be systematically diluted to no less than 25% + 1 share. Southern Shield intends initially to be financed with 50 per cent leverage, a figure which over time is expected to increase to 70 per cent. Under this arrangement, Swedish Stirling's financial commitments in future deals – out of the 100 PWR BLOK that Southern Shield will be able to finance initially – can amount to a maximum of EUR 6 million, which the company intends to finance with green loans. The formation of the Southern Shield is subject to approval by IDC Credit Committee and that the parties enter into necessary agreements.
“We now have a solution in place that allows for complete focus on the development and the sale of Stirling technology. It’s better to be the best at one thing than to be good at many,” says Sven Sahle, Chairman of the Board and largest shareholder of Swedish Stirling.
Swedish Stirling has previously signed agreement and a declaration of intent with South African ferrochrome producers Afarak Mogale Ltd and Glencore Operations South Africa Ltd for two facilities comprising 7 and 25 PWR BLOK units, respectively. In both cases, the agreements relate to power generation services, where Swedish Stirling’s PWR BLOK units convert the ferrochrome companies' residual gases into electricity that the companies then buy. Swedish Stirling's long-term strategy and express future ambition is to manufacture and sell the PWR BLOK.
“The formation of Southern Shield and the collaboration with IDC not only ensure the financing of the initial Glencore project, but give us a long-term solution under which, going forward, we can offer the PWR BLOK to counterparties who want to own the equipment themselves and to those who prefer an off-balance sheet solution, says Gunnar Larsson, CEO of Swedish Stirling.
For further information please contact:
Sven Ljungberg, CCO, Swedish Stirling AB, +46 (0)31 385 88 30 ir@swedishstirling.com.
About Swedish Stirling
Swedish Stirling AB is a Swedish clean tech company founded in 2008 with a mission to further refine the incomparable ability of Stirling technology to convert thermal energy to electricity. The company’s latest product – the PWR BLOK 400-F – is a unique proprietary solution for recovering energy from industrial residual and flare gases and convert them to 100 % carbon-neutral electricity with high efficiency. The PWR BLOK is – according to independent certification – the cheapest way of producing electricity that exist today and gives greater CO2 savings per invested Euro than any other type of energy source. The company’s shares are listed in Sweden on the NGM Nordic MTF. Read more at www.swedishstirling.com
About The Industrial Development Corporation (IDC)
The Industrial Development Corporation of South Africa (IDC) was founded in 1940. It is a national development finance institution that was set up to promote economic growth and industrial development. IDC is owned by the Republic of South Africa and is under the supervision of the Economic Development Department. IDC strives to promote entrepreneurship by assisting in the building of competitive industries and companies based on sound business principles. Read more at www.idc.co.za/