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CHARBONE HYDROGEN announces a MOU with NORTHWOODS HYDROPOWER Inc.

BROSSARD — CHARBONE HYDROGEN Corporation announces the execution, as of August 16, 2022, of a non-binding memorandum of understanding between its fully owned subsidiary, Charbone Corporation USA, and NORTHWOODS HYDROPOWER INC., pursuant to which the parties are entering into discussion and negotiation for the acquisition by Charbone USA of the Wolf River Hydro Limited Partnership, which own a 700 kW operating hydropower plant in Shawano, Wisconsin.

Further to the acquisition by Charbone USA of the Wolf River Hydro Limited Partnership, Charbone USA will complete and update its due diligence on the Tower Kleber Limited Partnership and the Black River Limited Partnership (collectively with the Wolf River Hydro Limited Partnership), consisting of a total of 2,760 kW portfolio of three operating hydropower plants located in the Onaway region in Michigan.

The terms and conditions for the acquisition of each of the Limited Partnership will be in the form of a purchase & sale agreement to be concluded for each of the Limited Partnerships. The parties wish to conclude a PSA and close the acquisition of each Limited Partnership in stages, starting with the acquisition of the Wolf River Limited Partnership to be concluded on or before November 15, 2022, and the acquisition of the two remaining Limited Partnerships to be concluded on or before December 15, 2022.

The Limited Partnerships are parties to long-term power purchase agreements with large local utilities and are expected to provide Charbone USA with recurrent revenues starting in Q4-2022. Charbone’s strategy is to acquire its own hydropower plants and to modernize and optimize them in order to increase the production and the value of the assets for its shareholders, and further assist Charbone with its deployment of a green hydrogen regional hub.

Charbone brings to the table its background in the development and the construction of modular and scalable facilities dedicated to the production of green hydrogen. All plants provide access to Charbone for land space so as to accommodate the green hydrogen facilities while Charbone believes that the actual capacities of the existing plants can be increased by the automation and modernization of the facilities with newer hydro turbine technologies.

Northwoods management and operation team have agreed to continue to perform their duties under Charbone ownership and will work and assist Charbone’s engineering team to implement optimisation, modernization, and automation projects at each of the plants.