Australia's EnviroMission Limited has executed a Heads of Agreement with a multi-billion dollar Japanese Fund that sets out a major funding commitment that will take the La Paz Solar Tower to the project finance stage and provide EnviroMission with development capital for additional projects.
The agreement includes an investment of US$10 million on or before September 30, 2015 by way of direct equity investment at US$0.20 per share (50,000,000 shares) or a twelve month non-interest bearing convertible note with a conversion price of US$0.20 per share.
Within nine months of the initial closing, the find will subscribe and pay for US$50 million 'Subsequent Placement Shares'.
If the initial payment is made via a twelve month convertible note and the note is not converted, the Japanese Fund will subscribe and pay for US$60,000,000 Subsequent Placement Shares.
The Japanese Fund has also agreed to invest US$50 million into the La Paz Solar Tower Development at project company level.
As a potential additional investment, EnviroMission has agreed that the Japanese Fund shall have the right, but not obligation, to invest US$50,000,000 or more per Solar Tower Project at the project company level.Roger Davey, EnviroMission Chief Executive, said:
"Representatives of the Japanese Fund conveyed strong enthusiasm for investment within the renewable energy sector for the certainty energy investment historically delivers and more so that this investment will provide them with the exposure and opportunity to be involved in 'highly differentiated clean green first to market Solar Tower energy technology'."
The Japanese Fund indicated to Mr Davey at their meeting in Arizona that they are 'totally committed to the EnviroMission investment and Solar Tower development success.'Mr Davey said:
"This company changing investment will provide EnviroMission Limited with funding necessary to commercialise Solar Tower development in Arizona and will substantially underwrite EnviroMission's global development objectives."
The EnviroMission Solar Tower will be constructed in Arizona east of Lake Havasu, which straddles the Arizona-California border between the towns of Parker and Quartzsite in La Paz County, roughly 130 miles west of Phoenix.
A single 200MW Solar Tower power station will provide enough electricity to power around 100,000 typical American households, or remove the equivalent of 220,000 motor vehicles from the roads.
The $750 million to $1 billion project is expected to go online in next years. The La Paz solar tower will be nearly 2,625 feet tall (800 m).