Active Energy has signed a Memorandum of Understanding with a Regional Government in Ukraine, relating to the management, development and sustainable commercialisation of approximately 186,500 hectares of mature commercial forestry in northern Ukraine (the “MoU”).
Under the terms of the MoU, Active Energy, through its forestry management division AEG TimberLands, will work exclusively in introducing international forestry and environmental standards of sustainable forestry management to improve the value and yield of the forests.
This will be achieved through the implementation of more efficient logging practises and technologies and the efficient use of merchantable timber, which AEG WoodFibre can purchase for its processing operations at the Yuzhny port, near Odessa in Ukraine.
In addition, new commercial opportunities pursuant to the MoU will allow increased utilisation of forest waste, currently burnt in situ, for the production process of AEG CoalSwitch’s innovative fuel replacement product.
Management envisage that a facility to manufacture AEG’s CoalSwitch product will be constructed close to the forestry, to create the supply of CoalSwitch to the region’s existing coal-fired power plants.
The Company, in tandem with international forestry consultants, and the Ukrainian Forestry Institute, has been appraising the quality of forestry, operational and managerial practices, inventories, logistics and market conditions over the past seven months.
The MoU effectively replicates the type of forestry asset management and commercial agreements established by Active Energy with the Métis Settlements in Canada.
Additionally, it should increase the Company’s revenue potential from Ukraine and provide the regional forestry authorities with guaranteed offtake agreements for currently unused material.
Active Energy Group is an AIM quoted international timber processing, forestry management and renewable energy business with three complementary divisions with robust intrinsic value as standalone operations: AEG WoodFibre, AEG TimberLands, AEG CoalSwitch.
