KEY POINTS
- Fusion Fuel signs LOI for 51% stake in South African specialized fuel joint venture.
- First project already awarded by multinational’s subsidiary; €480,000 investment planned.
- Deal offers immediate cash flow and strategic expansion for the struggling Nasdaq-listed firm.
Through a new joint venture, Fusion Fuel Green PLC, a small-cap clean energy company listed on the Nasdaq, is attempting to enter the specialized fuels market in South Africa.
The Dublin-based business announced on Monday that it and a privately held South African fuel technology company have inked a non-binding Letter of Intent to collaborate on a project that could start producing cash flow almost immediately.
Fusion Fuel would have a 51 percent controlling stake in the partnership, which is still pending due diligence and final agreements, and it would rely on the South African partner’s exclusive boiler system.
A commercial facility contract granted to the partner by a subsidiary of a global food and beverage company already secures the first installation.
Fusion Fuel intends to invest €480,000 ($528,000) in the business over the course of four months, with funding contingent on project completion. In the first year, the investment should generate about $248,000 in free cash flow, and over the next five years, it should generate $1.27 million. Additionally, the agreement includes a two-year first-refusal right to future projects and a 10% annual interest rate on capital returned to Fusion Fuel.
Small Company, Big Strategic Step
For Fusion Fuel, whose market capitalization is just $3.6 million and whose share price has tumbled 82% over the past year, the deal is as much about credibility as cash flow. “This is not just another development opportunity,” said CEO John-Paul Backwell. “It’s a chance to participate in an already-awarded project that brings immediate revenue potential.”
The South African project is part of a broader repositioning. Earlier this year, Fusion Fuel announced a non-binding agreement to buy a UK energy distribution company, and its subsidiaries have been securing contracts in Dubai for large-scale LPG installations. The company also recently regained full compliance with Nasdaq’s listing requirements after a rough trading year.
Meanwhile, Fusion Fuel has been reshuffling its portfolio, selling down its stake in Spanish hydrogen developer P2X Spain and striking a distribution agreement with a Chinese hydrogen equipment maker to expand into Iberia and Latin America.
If the South African joint venture is finalized in the third quarter as planned, it will mark a rare instance of a micro-cap clean energy company securing an overseas contract that’s both revenue-ready and strategically aligned with its low-carbon fuel ambitions.
