Altech rolls out funding strategy for salt battery plant

Altech Batteries has received interest from debt funders for its proposed cutting-edge sodium chloride battery project it plans to build using a mix of debt, equity, government grants and offtake agreements.

The company is planning to produce its “Cerenergy GridPack” batteries courtesy of a 120MWh manufacturing facility in Germany. Remarkably, the active ingredient in the batteries is plain table salt.

The “four pillar” financing strategy put together by the company has been designed to include capital expenditures, financing costs and operational contingencies.

As a precursor to the funding plan, Altech recently announced the successful completion of a placement of 66.6 million new shares for $4 million. The funds will primarily be used to help pay for the bigger financing process and for securing environmental and project permitting.

To get the debt process underway, investment teasers have been distributed to 10 commercial banks and two venture debt funds. The company says with the strong interest it has received so far, a secure data room has been set up to allow a short-listed group of potential financial partners the opportunity to do in-depth due diligence.

Altech has also fired the starting gun on equity funding initiatives by engaging with strategic investors who align with green energy transitions, such as energy utility groups, data centre operators and investment funds. Non-disclosure agreements have been signed with multiple parties and draft term sheets have been shared to formalise discussions. Altech could also give up a minority interest in the project to one or possibly two parties who will ultimately assist in its funding – avoiding the need for the company to put too many additional Altech shares in the market.

The interest in funding Altech’s plans should not come as a complete surprise given only two months ago, the company inked its first letter of intent for offtake which would appear to signal strong market demand for its product.

The deal, signed with Zweckverband Industriepark Schwarze Pumpe (ZISP), provided for the supply of 30, one megawatt Cerenergy GridPack sodium chloride batteries per year to the major German industrial park for energy storage as part of a 5-year deal starting in 2027.

The deal with ZISP is good news for Altech and is pivotal for Lusatia, as the region has always relied on coal for its industrial power needs.

Altech Batteries CEO and managing director Mr Iggy Tan said: "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. 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”

The sodium chloride battery technology is a relative newcomer to the green energy sector, which is bidding to find a solution to energy storage.

Altech’s Cerenergy offering was developed in partnership with Fraunhofer IKTS and is a solid-state unit that is fire and explosion-proof. The batteries have a lifespan of more than 15 years and can operate under extreme conditions, which the company says makes them a safer and more sustainable alternative to lithium-ion batteries.

Management is also working on its Silumina anodes project, which aims to give lithium-ion batteries a major reboot. Altech thinks adding silicon to the technology could boost the batteries’ energy capacity by up to 30 per cent, which may be a game-changer for electric vehicles, potentially easing the “range anxiety” which holds back some buyers.

The big challenge for green energy has always been large-scale, affordable battery storage. Whilst vanadium has gone some of the way to filling that void, Altech’s batteries that run on table salt come with a plethora of advantages.

Those advantages will no doubt be front a centre in Altech’s ongoing funding discussions.

Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au