Velocys PLC GBP27m UK Government grant for Altalto project (2948J)
December 12 2022 - 2:00AM
UK Regulatory
TIDMVLS
RNS Number : 2948J
Velocys PLC
12 December 2022
12 December 2022
News Release
Velocys plc
("the Company")
Award of GBP 27m grant for Altalto Immingham Sustainable
Aviation Fuel project
Significant non-dilutive project funding from UK Government
Advanced Fuels Fund to advance UK Altalto Immingham reference
project
Velocys plc (VLS.L), the sustainable fuels technology company,
announces that its wholly owned subsidiary, Altalto Immingham Ltd.,
has been awarded a grant of up to GBP 27 million from the UK
Department for Transport's ("DfT") Advanced Fuels Fund for the
Altalto Immingham Sustainable Aviation Fuel ("SAF") project. The
purpose of this project, which is being developed under an existing
Joint Development Agreement between Velocys and British Airways PLC
("British Airways") is to deliver a commercial waste-to-SAF plant
in Immingham, UK. The grant will allow Altalto Immingham to deliver
the Front-End Engineering Design ("FEED") stage of the project.
The grant funding will be distributed over the grant period from
December 2022 to March 2025 and is conditional upon receipt of
private sector matched funding. Altalto Immingham has obtained
Letters of Intent from a number of existing and new potential
partners for the private-sector matched funding requirement with
the first tranche of private funding due to be in place by April
2023.
Velocys' cash contribution into the Altalto Immingham project
over the two years from April 2023 is not expected to exceed GBP 8
million, and this sum may be reduced by bringing in additional
investors into the project.
The grant funding will be used for the completion of the project
FEED, which will incorporate the technology packages of the
licensors (including Velocys) and develop the basis for the
Engineering, Procurement and Construction ("EPC") contract. In
parallel, the commercial agreements required to support the plant
will be put in place. All of these will support the Final
Investment Decision ahead of commencement of construction, which is
targeted to occur in 2025, consistent with the UK Government's
ambition. In line with its commercial strategy, Velocys will charge
license fees for the utilisation of its proprietary technology at
commencement of construction. Based on this timing, commissioning
of the Altalto Immingham project is expected to begin in 2027.
Velocys has previously received grants for the Altalto Immingham
project of GBP1.7 million from the DfT's Green Fuels, Green Skies
competition and a series of grants totaling GBP934,000 from the
Future Fuels for Flight and Freight competition, the predecessor to
Green Fuels, Green Skies.
The GBP165 million Advanced Fuels Fund provides grants to
support the development of commercial-scale SAF plants that are at
an advanced stage, enabling them to become ready for investment and
construction. The funding is aimed at achieving the UK Government's
stated ambition of having at least five commercial scale SAF plants
under construction in the UK by 2025. The key objective of the
Advanced Fuels Fund is to kick-start the UK advanced fuels sector
with the commercial deployment of innovative fuel production
technologies that are capable of significantly reducing near-term
UK aviation carbon dioxide emissions.
Henrik Wareborn, CEO, said:
"We are extremely pleased the UK Government has awarded Velocys
this important grant which will deliver the FEED stage for our
Altalto Immingham reference project accelerating the commercial
deployment of Velocys' technology and delivering cashflow. We
welcome this clear commitment from Government to having commercial
SAF plants built in the UK. We are delighted that a number of large
commercial companies have indicated their support for the project
through indications of matched funding contribution and the
provision of services to progress the project."
For further information, please contact:
Velocys
Henrik Wareborn, CEO
Philip Sanderson, CFO
Lak Siriwardene, Director of Communications +44 1865 800821
Panmure Gordon (UK) Limited (Nomad and
Joint Broker)
Hugh Rich (Corporate Broking)
Emma Earl (Corporate Finance)
John Prior (Corporate Finance) +44 20 7886 2500
Shore Capital Stockbrokers Limited (Joint
Broker)
Henry Willcocks (Corporate Broking)
Toby Gibbs (Corporate Advisory)
James Thomas (Corporate Advisory) +44 20 7408 4090
Radnor Capital (Investor Relations)
Joshua Cryer
Iain Daly +44 20 3897 1830
Buchanan (Financial PR)
Helen Tarbet
Simon Compton +44 20 7466 5000
--Ends-
Notes to Editors
Velocys is an LSE-listed, international sustainable fuels
technology company, traded on the AIM, providing customers with a
technology solution to enable the production of negative Carbon
Intensity synthetic, drop-in fuels from a variety of waste
materials. Synthetic fuel is the only commercially available,
permanent alternative to fossil aviation fuels. The Velocys
technology is IP-protected in all major jurisdictions.
British Airways has an option to acquire a share of Altalto
Limited, the 100% owner of Altalto Immingham Limited, from
Velocys.
Two reference projects (Bayou Fuels, US, and Altalto, UK) are
designed to accelerate the adoption and standardise the Velocys
proprietary Fischer Tropsch (FT) technology with an integrated end
to end solution, including renewable power and carbon
sequestration.
Velocys is enabling commercial scale synthetic fuel production
in response to the clean energy transition, with significant
additional positive air quality impacts.
www.velocys.com
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END
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