Mr. Randy MacEwen reports

BALLARD SIGNS $2.5M TECHNOLOGY SOLUTIONS DEAL FOR HYDROGEN BACKUP POWER SYSTEMS IN CHINA

Ballard Power Systems Inc. has signed a definitive agreement with Guangdong Nation Synergy Hydrogen Power Technology Co. Ltd. for a technology solutions transaction to enable Synergy to exclusively manufacture and sell Ballard's direct hydrogen FCgen-H2PM fuel cell backup power systems in China.

Under the agreement, Ballard will license the designs of its 1.7- and five-kilowatt FCgen-H2PM systems to Synergy for manufacture in the city of Yunfu in Guangdong province and exclusive sales in China. Synergy has paid Ballard an upfront technology solutions fee of $2.5-million for the licence and related technology services and will make additional recurring payments to Ballard for each unit sold, subject to annual minimums. Ballard will also be the exclusive supplier of air-cooled fuel cell stacks to Synergy for use in the FCgen-H2PM systems that it produces and sells.

Ballard recently sold its methanol telecom backup power business assets to Chung-Hsin Electric & Machinery Manufacturing Corp. (CHEM) for a purchase price of up to $6.1-million, while retaining the company's direct hydrogen fuel cell backup power system assets. The direct hydrogen fuel cell backup power system has since been rebranded FCgen-H2PM. In the transaction with CHEM, Ballard also signed a fuel cell stack supply agreement with CHEM, which includes minimum sales of $2-million.

Randy MacEwen, Ballard's president and chief executive officer, said: "In parallel to the recent sale of our methanol-based backup power business to CHEM, we identified an opportunity to surface additional value on our direct hydrogen-based backup power system designs. The transaction announced today provides a strong foundation for future sales by Synergy of direct hydrogen backup power systems in China using Ballard's leading system design and fuel cell stacks. We will also continue to market our FCgen-H2PM products to provide backup power for critical infrastructure in select European markets."

Chen Xiaomin, general manager of Guangdong Nation Synergy Hydrogen Power Technology, said: "We see significant market potential for direct hydrogen fuel cell backup power systems in China, particularly given the recent establishment of China Tower Corp. The Ballard brand is synonymous with PEM fuel cell technology leadership. We believe Ballard's FCgen-H2PM systems, featuring the world's leading PEM fuel cell stacks, deliver the best value for customers based on cost, reliability, extended run time and footprint, as compared to all other direct hydrogen fuel cell backup power systems in the marketplace."

Ballard and Synergy have previously signed a number of important deals. These include licensing and equipment supply agreements for fuel cell power modules, parts kits and stacks for buses in China. The largest-ever fuel cell bus agreement, to support the deployment of 300 buses in the cities of Foshan and Yunfu, was signed by Ballard and Synergy in 2015.

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