Xergi A/S To Invest in Environmental Power Corporation (EPG), Signs New Cooperation Agreement

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08:10:18 am on April 29, 2009

Environmental Power Corporation (EPG) announced yesterday that it has received new investment from technology provider Xergi A/S, as well as a new cooperation agreement between the two companies.

Xergia has agreed to purchase $3 million worth of EPG’s 14% convertible notes. Next month, Xergi’s $3 million payment obligation for the notes will cancel out Environmental Power Corporation’s $3 million payment for technology rights.

The companies have also updated their technology agreement. From a company press release, here are the details of the new agreement:

Under the terms of the new agreement, EPG and its wholly owned subsidiary, Microgy, Inc., will continue to have exclusive licensing rights for Xergi’s anaerobic digester technology in North America, while reducing the license fees on Microgy’s current and future projects. In addition, EPG and Xergi will continue to collaborate on development and use of other technologies and techniques such as the use of micro-organisms and enzymes, which enhance the production of biogas from manure and other organic substrates.

In the press release, executives from both companies commented on the agreement:

This investment and agreement demonstrate Xergi’s continued confidence in Environmental Power’s business model and its commitment to support the company’s growth in the renewable energy market in North America. Together with Xergi, we will continue our work on technological advancements that will increase energy production from existing feed stocks, while lowering capital and operating costs for large-scale renewable energy projects," said Rich Kessel, President and CEO of Environmental Power. "We look forward to developing innovative solutions that maximize renewable energy from agricultural and other waste organic feed stock."

"Environmental Power and its subsidiary Microgy have established themselves as the leader in development and commercialization of RNG(R) projects in North America," said Frank Rosager, President and CEO of Xergi. "We look forward to learning more about how to produce the equivalent of Environmental Power’s RNG(R) product in Europe while supporting Environmental Power’s continued growth in North America. This is truly a mutually beneficial relationship."

Rich Kessel added, "Environmental Power would like to thank Xergi for making this strategic investment as an indication of its continued confidence in Environmental Power and commitment to support Environmental Power’s growth."

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