Altech Batteries Ltd (ASX:ATC) has embarked on a preliminary multi-faceted financing process after last month delivering a “highly positive” definitive feasibility study (DFS) for an 8,000 tonnes per annum (120 GWh) alumina-coated metallurgical silicon plant envisaged for Saxony, Germany.
The important financing process being undertaken for the Silumina Anodes™️ project is based on grant applications, debt, green bond financing and potential private customers.
READ: Altech Batteries fields "highly positive" DFS for Silumina Anodes™️ Battery Materials Project
Government options
As part of the grant application process, Altech Batteries is seeking support at state, federal and European levels.
State employment grants for a total maximum sum of €7.48 million are being sought from the Saxony State Government.
At a federal level, the company is aiming for German Government assistance in the form of environmental and/or federal technology grants or R&D grants up to €15 million provided through Kreditanstalt für Wiederaufbau KfW.
Another area of potential support at this level is federal investment funding for special projects referred to as ‘Resilience and Sustainability of the Battery Cell Manufacturing Ecosystem’ up to €50 million provided through KfW with a 50% government guarantee.
Altech Batteries is also seeking support from the European Government through an application for an Important Project of Common European Interest (IPCEI) for not less than €50 million that involves a projection of a potential build-up until 2030.
This application has been made and will only become accessible for expansion of capacity beyond the 8,000 tonnes per annum capacity.
Other sources
Regarding the debt process, the company has been in discussion with European banks for debt financing of the Silumina Anodes™️ project, including the European Investment Bank (EIB).
The EIB specialises in zero valley special economic zone for projects of competitive importance.
Green bonds are another potential funding source with CICERO providing a rating of 'Medium Green' to the Silumina Anodes™️ project.
This evaluation, formally termed a ‘Green Bond Second Opinion’, confirms that the project is suitable for future green bond financing.
Altech is considering debt via the green bond capital market and has advisers working on this process.
Offtake potential
Potential customers provide another option and the company has executed non-disclosure agreements (NDAs) with prominent automotive conglomerates in Europe and the United States, that have shown keen interest in Altech’s Silumina Anodes™️ technology.
NDAs have been executed with two German automakers, two US automakers, one US battery materials supply company and one European battery maker.
Altech Batteries will seek to secure offtake agreements with these potential strategic customers once commercial samples can be provided.