HydrogenPro Joins Key Suppliers and Investors in Providing Convertible Loan to DG Fuels’ Sustainable Aviation Fuel Facility in Louisiana
29 October 2021:
HydrogenPro AS (OSE: HYPRO) (“HydrogenPro”) today announced that it will join Black & Veatch and Energy Vault, Inc. (“Energy Vault”) in financing the remaining capital requirements of DG Fuels, LLC’s (“DG Fuels”) sustainable aviation fuel (SAF) project in Louisiana, which is expected to be completed in mid-2022.
“HydrogenPro has been supporting DG Fuels’ landmark project for several years and we are pleased to see that the financing process is nearing completion. We strongly believe in DG Fuels’ mission to contribute to cleaner transportation industries, and the scope of this project will be greater for HydrogenPro than previously communicated due to increased production capacity. Furthermore, we see this as a great opportunity to partner with DG Fuels on additional projects in the US,” says Mårten Lunde, CEO of HydrogenPro.
HydrogenPro injects a convertible loan of USD 3 million in DG Fuels’ recently completed capital raise, which, together with co-investors, funds all expected cash requirements up to the planned financial close. DG Fuels is expected to raise additional equity and debt to fund the construction of its production facility currently designed with a production capacity of 10,355 barrels per day. This in turn, will require a water electrolyzer capacity of up to 839 megawatts (MW), with HydrogenPro being the exclusive provider, which is a significant increase compared to the 120 MW previously announced.
DG Fuels aims to develop several facilities in North America and Europe, designed to produce low-carbon sustainable aviation fuel by combining carbon from waste feedstock with green hydrogen from renewable sources. The Louisiana facility is the company’s first major project. Each facility will produce low-emissions fuel in a process that converts agricultural and timber waste feedstock into fuel with a carbon efficiency of approximately 93 percent or more, which means the project can produce more fuel with less feedstock than other processes.
Due to the high demand for sustainable aviation fuel, DG Fuels has received several firm commitments and nonbinding letters of intent for offtake agreements for a material portion of its expected production. These long-term agreements have attractive terms with brand name airlines and other companies interested in purchasing SAF.
Black & Veatch, one of North America’s largest engineering, procurement, consulting and construction companies, will conduct a Front-End Loading (FEL) 2 study in the coming months. Once the FEL2 study is completed, the project will initiate the financing process of the construction phase.
“HydrogenPro is a key relationship vendor due to its high-performance and scalable technology, which fits well with our system, allowing us to produce green hydrogen in a cost-effective manner. Attaining scale is critically important for our project. HydrogenPro’s technology will enable us to achieve these ambitions,” says Michael Darcy, CEO of DG Fuels LLC.
Gary Martin, vice president of Black & Veatch added, “This important agreement enables the DG Fuels project to proceed in developing cleaner fuel for the critical transportation and mobility marketplace. It will accelerate the green economy, strengthen our country’s economic, environmental, and renewable energy infrastructure as well as create high paying jobs in construction and equipment manufacturing.”
Robert Piconi, CEO and Co-Founder of Energy Vault commented: “We are proud to collaborate with DG Fuels and its partners in its mission of economically enabling 24/7 renewable power – an important component in delivering SAF to the transportation industry. Maximizing the use of local materials and local job creation is a key differentiator of the Energy Vault storage solution that supports the overall sustainability goals of the project.”
The project is progressing on the award of key contracts and engineering plans. DG Fuels expects the SAF facility to be placed into service by 2025.