Altalto SAF project completes necessary work to claim 1st tranche of UK government grant
Velocys plc announced May 10 that its wholly owned subsidiary, Altalto Ltd., has completed the necessary work to claim the first £7 million (USD$8.9 million) tranche of the U.K. government’s £27 million (USD$34.2 million) grant award for its Altalto Immingham sustainable aviation fuel (SAF) project.
“In addition, as planned, the project has obtained the first tranche of private funding for the period from April 1 from its existing private-sector participants,” the company stated.
The Altalto project plans to deliver a commercial waste-to-SAF plant in Immingham, U.K.
The grant, awarded by the U.K.’s Department for Transport announced in December, and matched funding will enable Altalto to complete the front-end engineering design (FEED) stage of the project, Velocys stated.
Following the completion of FEED and a successful final investment decision, construction is slated to begin in 2025 with full commercial operation expected in 2028.
Since the award of the grant in December, the Altalto project has entered into a number of technology-license and engineering-services agreements with technology licensors, and the FEED contract with Bechtel Ltd., utilizing the first tranche of grant funds provided by the government, according to Velocys.
Further draw down of the grant is subject to the demonstration of project milestones with matched funding requirements to be met over two years, through March 31, 2025.
This March, the company announced the appointment of a leading global investment bank to advise on the financing of Velocys’ reference projects and to assist in obtaining the matched funding from private-sector investors, which is on track to be in place during the fourth quarter of this year.
Velocys’ cash contribution to the Altalto project over two years starting last month, including its contribution to the first tranche of private funding of £1 million (nearly USD$1.3 million), is not expected to exceed £8 million (USD$10.2 million), with Velocys intending to recover any funding it provides at the earlier development stages following receipt of third-party investments in the project, the company stated.