Vulcan Energy Resources (ASX:VUL) is on the cusp of securing up to $850 million in European Investment Bank (EIB) funding for phase one of its Zero Carbon Lithium Project.
Vulcan, which has a $354.47 million market capitalisation, says the funds, which are subject to due diligence completion, credit approval and legal agreement, and EIB’s governing bodies approval, are expected to serve as a cornerstone to complement ongoing debt funding discussions with export credit agencies and international banks.
Phase one of the project is targeting the production of 24,000 tonnes per annum of lithium hydroxide, equivalent to 500,000 EVs. Vulcan will supply key auto and battery makers in the European supply chain, including its second-largest shareholder, Stellantis.
The EIB is the lending arm of the European Union (EU) and one of the largest climate finance providers.
The EU seeks to provide support through a financial pathway toward sustainable and resilient domestic supply chain development for Europe to meet the EU’s goals to reduce net greenhouse gas emissions by 55% by 2030 and no net emissions of greenhouse gases by 2050.
Vulcan has already begun its debt and project level equity financing process, supported by BNP Paribas, following ‘positive’ market sounding in 2023 from commercial banks, development banks, and government-backed export credit agencies.
This included a $200 million non-binding letter of support from Export Finance Australia (EFA) and indication of ‘strong’ ECA support from Canada, Italy, and France during 2023.
Vulcan Energy Resources Managing Director and CEO Cris Moreno says the support from EIB is a “strong” and “tangible” signal of confidence at the European level for the Zero Carbon Lithium project.
“This progression in EIB’s financial appraisal is a positive step forward in the sequence of our debt and project level equity financing for phase one of the project, which is anticipated to create millions of tonnes of carbon avoidance in the EV supply chain in the years to come.”
According to Vulcan it is developing the world’s first integrated renewable energy and Zero Carbon Lithium Project in the Upper Rhine Valley, Germany, aiming to decarbonise the lithium supply chain for electric vehicles (EVs) and to supply local communities with renewable heat and power.
Write to Adam Drought at Mining.com.au
Images: Vulcan Energy Resources
