AP Ventures is a global venture capital fund focussed on investment in the hydrogen sector, with their investments supporting companies through the commercialisation and scale-up phases.
Under the terms of the convertible note deed, APV will make a A$4 million investment in Hazer by acquiring the same amount of unlisted $1 convertible notes and 2.25 million unlisted options in the company.
As part of the deal AP Ventures will be entitled to nominate a representative to join the Hazer board.
The options will expire five years from the date of their issue and cannot be exercised in the first 12 months following issue of the options, subject to shareholder approval.
Hazer is set to commence construction of its A$17.5 million Commercial Demonstration Project near Perth early next year and once complete will produce up to 100 tonnes of green hydrogen per year, using the company's patented Hazer Process.
The process uses wastewater methane and splits it into hydrogen, high-grade graphite.
Funds from the convertible note and option will be used by Hazer to progress the project, ramp up its research and development, and support the company's business development activities, including the scale-up for larger commercial-scale Hazer Plants.
Hazer Group chair Tim Goldsmith encouraged all shareholders to support the transaction at the next meeting in January, saying it would be a positive outcome for the company.
"AP Ventures will provide valuable support to the Board and management as we progress the scale-up and commercialisation of the Hazer technology," he said.
AP Ventures managing partner Andrew Hinkly said he believed Hazer's tech could offer a unique solution to the low-cost, low-emission production of hydrogen and graphite.
Hazer highlighted a substantial year of progress for the company in its shareholder presentation, after riding out the COVID-19 market crash and making final investment decision on the Commercial Demonstration Project in June.
However the disruption has slowed project activities, with Hazer expecting its schedule on the project to be pushed out by around 10 weeks, with a target commissioning in October 2021, however it said the project is still set to remain on budget.
Last week, the company noted Mineral Resources had decided not to go forward with their collaboration agreement with Hazer to look into developing a synthetic graphite project.
However Goldsmith said this was because graphite had fallen down MinRes' priority list, rather than the results Hazer had achieved.
The company's shareholder presentation underlined the gathering pace of the global hydrogen market, pointing to a Bank of America estimate that the market could be worth US$2.5 trillion alongside $11 trillion of investment by 2050.
Hazer said there had been significant interest in the Hazer technology from international companies. including Japanese engineering firm Chiyoda Corporation - which Hazer hopes will translate to feasibility studies in the new year.
The company said its focus in 2021 would be to use the knowledge gained from its CDP to design larger-scale Hazer Plants in the realm of 1000-2500 tonnes per annum of capacity.
"Hazer is strongly positioned to capture the huge opportunities offered by the growth in the hydrogen economy and rapid push to decarbonise heavy industry and transport," the company said, but noted the market was still emerging with no clear, deep price signals yet for green hydrogen.
In Question Time today in parliament, prime minister Scott Morrison attended via virtual link due to being in isolation after his trip to Japan where he discussed the two countries' low-carbon technological developments - including hydrogen.
"Hydrogen allows us to realise our low emissions future, a net-zero emissions future, as soon as possible," he said.
Hazer's share price was trading up 8.4% today, trading at 77c.
