AFC Energy plc, the industrial fuel cell power company, has signed a Heads of Agreement with DNR Industries Ltd., part of the Dubai-based investment and project developer Dutco Group of Companies (Dutco), to jointly fund and develop a business plan for the large-scale deployment of AFC’s fuel cells across the Middle East.
The business plan will focus on defining a commercial strategy for what is expected to be a significant commercial fuel cell deployment opportunity.
Pending the outcome of the business plan, the agreement is anticipated to result in the formation of a joint venture between the two companies to execute the plan, commencing in the first half of 2016.
The joint venture between AFC and Dutco is expected to cover the deployment of AFC’s fuel cell across the United Arab Emirates (UAE), Kingdom of Bahrain, Kingdom of Saudi Arabia, Sultanate of Oman, Qatar and Kuwait.
Based on initial estimates from market soundings already undertaken in the region individually and collectively by AFC and Dutco over recent months, this could present an opportunity on its own to deliver a large percentage of – if not in excess of – AFC’s stated target for 1GW of fuel cell development by the end of 2020.
The business plan will also explore potential commercial models for the joint venture between the two companies with a long-term strategic view being taken regarding the prospect for a regional power utility.
Adam Bond, AFC’s CEO, said, “I have long considered the Middle East to present AFC with an enormous near-term opportunity to deploy the company’s alkaline fuel cell technology into the growing clean energy portfolio of projects being supported in the region.”
“The potential to work in collaboration with a group with the regional stature as Dutco presents a significant opportunity to not only leverage highly complementary skills sets and characteristics of the two companies, but also create a sizeable business platform for the deployment of the AFC fuel cell on an unprecedented scale.”