The framework of a portfolio of agreements between Chakratec and German company EES (Chakratec’s local partner), and between an investment company based in Germany that has experience and a solid reputation in initiating investments in income-producing energy assets. The signed agreement is for collaboration in establishing three additional ultra-fast EV charging stations integrating the company’s KPB100 product, which serves to boost the grid power at the ultra-fast charging location while accelerating the charging pace. This agreement joins a similar agreement signed by the company a month ago for two additional sites.
This sale is part of the realization of the company’s strategy to install its products in international EV markets, which are growing rapidly and requires ultra-fast charging stations as critical infrastructure to reduce range anxiety and enable the transition to electric mobility.
The contract includes commercial sale of the company’s products from its new KPB100 line. In addition, under this agreement, and as part of the company’s strategy for introducing its products to the market, the company will supply the customer, through EES (which uses additional local entities), a complete turnkey solution for ultra-fast EV charging station.
Under the agreement, three stations are to be installed at three different sites:
1.1. A business and retail park in the city of Reiskirchen bei Giessen
1.2. Two hotels – one in Munich and another in Stuttgart
The customer, the company and EES reached agreements with the landowners to lease the sites for a period of 15 years, with an option to extend for a further five years, in return for payment of rent agreed between the parties.
Under the contract, the ultra-fast charging stations will be built by EES and the company (with the assistance of local subcontractors). The investment in building each station is approx. €0.5 million, of which 70% is the consideration to the company for the supply and installation of the KPB100 systems.
Following construction, the ultra-fast charging stations will be operated by EES and the company (through local subcontractors) for a period of 15 years. The customer will have the option to extend the operating period for five more years. The current expenses of the ultra-fast charging stations will be paid out of the expected income from operation of the stations and, as part of these expenses, the company is entitled to an annual payment for maintenance and professional services for the KPB100 products.
The agreements also include a mechanism for allocation of the current operating profit, between the customer, the company and EES. According to this mechanism, the company will be entitled to approx. 15% of the operating profit from the ultra-fast charging stations.
This agreement is part of the realization of the company’s strategy to operate also through establishment of a full turnkey solution for ultra-fast charging stations, to be established and operated by the company (including through local entities in the target country), where the company’s kinetic energy storage system, the KPB100 product, serves as a major component, enabling fast charging withstanding any capacity limitations in the power grid infrastructure at the fast-charging locations. The company estimates that the characteristics of this agreement, the added value of the company’s products that it reflects, and establishment of the facilities in cooperation with local entities, may encourage additional customers in Germany to act through the company and its partners, to accelerate the rollout of an EV fast-charging infrastructure, particularly in places where the power grid has limited power and capacity. The German customer has further announced that it has applied to authorities in Germany for support grants to finance the establishment of fast-charging stations at eight locations, for a total investment of approx. €4 million. This request is for the five sites for which contracts have already been made (the two sites reported on December 7, 2021, and the three additional sites reported in this announcement) and three additional sites that have already been identified, for which discussions with the site owners for fast-charging stations are underway. Successful completion of the negotiations and approval by the authorities of support grants for funding these sites, present potential for additional orders in the near future for another three sites (with each incorporating at least one unit of the company’s KPB100 product). The customer estimates that the authorities’ response to the application for financing of the sites for which an agreement has been signed, is expected in the coming months. Nevertheless, it has been agreed with the customer that should grants not be received from the government authority by the end of June 2022, construction will commence even without the grants, and without any change in the terms of the transaction vis-à-vis the company. Completion of the stations and commercial operation are scheduled for Q4/2022.
Boaz Weizer, CEO of Chakratec, said: “I am pleased to announce another commercial transaction for the advanced generation of our Kinetic Power Boosters. A second transaction in Germany, one of the most advanced and escalating EV markets in the world. . The current agreement, for the supply of a complete turnkey solution for another three ultra-fast charging stations, proves the significant added value our Kinetic Power Booster technology brings to our customers, as enablers for the establishment of ultra-fast EV charging stations even in locations where the power grid has limited power and capacity. This is the third transaction we’re announcing in recent weeks, and it is further evidence of the great interest in our product, which is the right solution at the right time for a market that is growing enormously, and which is expected to receive a significant boost from government and private investment to establish the critical infrastructure for realization of the vision of transitioning to EVs. This is an expression of faith in the technology we developed and in the potential of our advance product, the KPB100, scheduled to be launched in the coming months. This transaction is an example of the way in which we are implementing our market penetration strategy, and educating the market about our product’s benefits, while providing a turnkey solution of ultra-fast charging stations in collaboration with local partners having complementary capabilities. The transaction is a model and a benchmark also for additional customers and positions us as a significant player in the EV charging infrastructure in Germany, and in Europe in general, as the first company to provide a solution for the disparity in the power grid, applying an economical, proven, and green method that is not based on batteries. This announcement is also proof of how we keep our promises. Just six weeks ago, we announced the potential for an upcoming follow-on order, and we are already translating that promise into a contractual engagement. We are further announcing the potential for further expansion of sales in the near future, based on the relations forged with the customer, who we believe to be a marketing channel that will generate many more orders. Each order boosts interest and strengthens confidence in our solution among other customers in Germany and other European markets. I am confident in our ability to turn the considerable interest into business momentum and a significant volume of additional orders”.
Chakratec (TASE: CKRT) is a leading provider of kinetic (flywheel-based) energy storage technology and power-boosting products. Chakratec’s mission is to accelerate the adoption of EVs, by enabling vast deployment of EV fast-charging anywhere, even in location where the electricity grid is power-constrained. Chakratec’s Kinetic Power Boosters accelerate the charging, allowing ultra-fast charging, in less than 15 minutes, while deferring or eliminating the need to upgrade the grid infrastructure. Unlike solutions based on Lithium batteries, Chakratec’s Kinetic (Flywheel-based) Power boosters enable its customers to build robust, reliable, and long-lasting fast-charging infrastructure, based on sustainable, safe and cost-effective energy storage solutions.