EQTEC PLC (AIM:EQT) told investors its Italian plant has gained final approval to draw down a €2.9 million loan arranged last autumn to pay for performance improvements and to pursue commercial developments.

Lender Banca del Fucino approved the full drawdown after the AIM-listed company and the plant met all performance criteria needed to access the facility.

The bank gave its approval after a visit to the EQTEC Italia MDC biomass energy plant, located in Gallina, near Castiglione d'Orcia in Tuscany last week.

EQTEC said Italia MDC, which has been operational since March last year, intends to draw down the whole facility “imminently” to continue its development and pay for improvements and commercial opportunities.

Part of the 48-month loan will also be applied towards repayment of shareholder loans that have funded the project so far, including some of the €2.6 million of loans made by the PLC.

Group chief executive David Palumbo said it was a “significant milestone” and the financing by this traditional primary lender “indicates their confidence in our business proposition and underlines their investment strategy toward new energy solutions and supporting innovation”.

He added: “We remain committed to making Italia MDC a showcase of local capability , with new energy infrastructure in Italy and a demonstration of EQTEC syngas technology in a live, efficient and sustainable business."