Altech Batteries Ltd (ASX:ATC, OTC:ALTHF) continues to progress its funding strategy of the CERENERGY® sodium-chloride solid-state battery project in Saxony, Germany, advancing both debt and equity discussions, plus offtake agreements.
The project's financing strategy is structured across three key areas: debt, equity and grants — covering capital expenditures along with financing costs, working capital, debt service coverage, and an additional contingency for potential business interruptions.
“Altech is advancing both debt and equity discussions, along with offtake agreements, to fully fund the CERENERGY® project. We are seeing strong interest, especially from European banks and potential equity partners,” Altech CEO and managing director Iggy Tan said.
In June, Altech appointed a global big four professional services firm to assist in securing finance for the construction of Altech’s 120MWh CERENERGY® battery manufacturing plant.
Tan added: "The funding stage of any project is the most complex and challenging process of any project. Securing a big four funding adviser with expertise and a global network is a major step in our financing efforts.”
With both funding streams and offtake arrangements advancing, Altech is well-positioned to progress the CERENERGY® battery plant to construction.
Debt funding process
Altech has distributed a funding invitation document to ten commercial banks and two venture debt funds, receiving positive initial feedback.
Several institutions have expressed “strong interest” in financing the project. The company is now shortlisting potential lenders and has set up a secure data room to facilitate a detailed due diligence process.
Altech has stress-tested its definitive feasibility study (DFS) financial model to accommodate various funding scenarios.
Next steps include forming a lending syndicate and appointing a lead bank to structure the financing package.
Equity strategy
Altech plans to divest a minority interest in the project to one or two strategic investors, targeting large utility groups, data centre operators, and investment funds aligned with the green energy transition.
This approach aims to secure capital while leveraging strategic partnerships for long-term project success.
Several non-disclosure agreements (NDAs) have been signed with interested parties, and draft term sheets have been circulated. Altech expects these discussions to evolve into formal commitments, reducing the financial burden on the company.
Offtake agreement
Altech has also executed an offtake letter of intent (LOI) with Zweckverband Industriepark Schwarze Pumpe (ZISP).
Under the LOI, ZISP will purchase 30 MWh of energy storage capacity annually, consisting of 1MWh GridPacks for the first five years of production, conditional on battery performance tests and specifications.
This LOI provides a foundation for additional offtake agreements, bolstering the project's financing and construction timelines.