Licence Agreement with GHFG Ltd

CPH2 is pleased to announce that it has signed its first licence agreement with GHFG Ltd ("GHFG") for the construction of 2 gigawatts ("GW") of MFE electrolysers over a period of up to 20 years.

GHFG is a joint venture between international renewable independent power producer, Alternus Energy Group Plc ("Alternus"), and Eric Whelan, CEO of Irish based developer, Soleirtricity. Under the licence agreement, GHFB will produce the CPH2 MFE electrolysers at a new facility in Ireland and plans to start production during 2023. Each electrolyser produced by GHFG under this agreement will be installed alongside and powered from solar energy projects owned and operated by Alternus.

Under the agreement, CPH2 will receive an upfront licence fee, and thereafter, a technology fee per unit, followed by service and maintenance licences during the unit's life. The upfront licence fee is expected to be received in full by the end of the current financial year and to be recognised as revenue over the life of the contract.

The licensing of the CPH2 proprietary technology offers the Company the potential to significantly increase revenue in the short term without the need for additional capital expenditure. Given the business model's potential low cost and short lead time, the Directors believe it is an ideal opportunity to establish market share and improve market penetration on a global basis by using the high margin, low capex licencing strategy to fund further R&D.

CPH2, which is based in Doncaster, has a 2030 production target of 4GW per year, with 1GW made at its own facility and the rest manufactured under license by other companies including GHFG. Through the license, GHFG has access to CPH2's innovative MFE technology whilst having the flexibility to oversee its own production and delivery schedules.

Jon Duffy, Chief Executive Officer of CPH2, commented:

"We are pleased to have signed our first licensing agreement with GHFG. CPH2's vision and values are closely aligned with our new partners, Alternus and Soleirtricity, and I am pleased to be able to share our innovative technology with them through our licence model. A core component of our business model is licensing out production to other companies, whilst also producing a certain number of units ourselves. By 2030, our goal is to produce approximately 1GW at CPH2 facilities and 3GW under licence. Our licensing model will help facilitate our growth strategy and accelerate market penetration to scale the business globally by providing a long-term revenue stream for CPH2, without the need for major upfront capex."

Eric Whelan, Chief Executive Officer of GHFG Ltd, , commented:

"Soleirtricity has a long-standing successful relationship with Alternus which has focused on the solar industry to date. Through this joint venture, GHFG will be responsible for the production of electrolysers to match the deployment of new Alternus solar projects where the addition of green hydrogen generation makes sense. It will also provide more direct control over the supply chain. Green hydrogen installations will allow Alternus to diversify into additional revenue streams from its growing market penetration in key markets across Europe and beyond.  It will also best exploit entry to another large and critical market in clean energy. Energy produced from the Alternus solar assets will be optimised to produce 100% green hydrogen, which is a critical component in the decarbonisation of transport and heavy industry. We look forward to broadening our contribution to a net zero future with all parties involved in this exciting new partnership".

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