Altech Batteries Ltd (ASX:ATC, OTC:ALTHF) is making strong progress on funding its CERENERGY® battery project in Saxony, Germany. A major European bank is close to completing final checks for potential debt financing, including site visits. At the same time, Altech has applied for a federal government guarantee to reduce project risk.
In terms of equity funding, the company is looking for a strategic partner to take a 49% stake in the project and has also signed non-binding agreements to sell all battery output from the first five years of production.
Altech’s debt funding nearing mandate with major European bank
Altech previously engaged 10 commercial banks and two venture debt funds, receiving positive early feedback. One European institution with a strong record in financing innovation-led projects has emerged as the preferred lender. Though a formal mandate has yet to be signed, technical due diligence is in its final stages, with the bank’s teams visiting Altech’s facilities in Dresden and Hermsdorf.
The company is advancing its application for a German federal guarantee, with Finance Ministry officials already briefed. The guarantee would underwrite the project’s debt component, improving the project’s risk profile for financiers.
Concurrently, Altech is pursuing equity funding and has engaged multiple advisers to facilitate the process. The company intends to sell a 49% stake in the project to one or two strategic partners that offer more than capital — targeting utilities, data centre operators, green investment funds and industrial battery stakeholders.
Several non-disclosure agreements have been signed, with draft term sheets already circulated. These documents are forming the basis for advanced negotiations on equity structure and partnership roles.
Government grants applied at EU, federal and state level
Grant applications have been submitted to programs operated by the State of Saxony, the German Federal Government and the European Union. These funding schemes support clean energy transition projects, particularly those converting lignite coal-based infrastructure to renewable systems.
Grant funding would support multiple facets of the CERENERGY® project, including advanced technology development, local employment and high-tech infrastructure.
Three offtake agreements secure full initial production
Three Letters of Intent (LOIs) have been signed covering 100% of CERENERGY®’s first five years of output:
- ZISP: A September 2024 agreement with Zweckverband Industriepark Schwarze Pumpe to acquire 30 megawatt-hours (MWh) of energy storage per year.
- RefLau: A joint venture between Enertrag SE and Energiequelle GmbH, will start with 30 MWh and increase to 32 MWh per year from year two, also supplying green electricity to Altech.
- Axsol GmbH: Will exclusively distribute CERENERGY® batteries to the Western defence sector, aiding early market entry.
These agreements are expected to be instrumental in finalising project financing and construction timelines.