(Sharecast News) - Velocys announced on Wednesday that Altalto has claimed the first tranche of £7m from the UK Department for Transport (DfT) advanced fuel funds grant for the Altalto Immingham sustainable aviation fuel project.
The AIM-traded firm said Altalto had completed the necessary work to claim the grant up to 31 March, as planned.
In addition, the project had secured the first tranche of private funding from its existing private sector participants from 1 April, as per the project plan.
The board said the Altalto project was aimed at developing a commercial waste-to-sustainable aviation fuel (SAF) plant in Immingham, with the DfT grant, along with the matched funding, set to enable Altalto to complete the front-end engineering design (FEED) stage of the project.
Following the completion of FEED and a successful final investment decision, construction would begin in 2025, with full commercial operation expected by 2028.
Since the award of the DfT grant in December, the Altalto Immingham project had entered into a number of technology licence and engineering services agreements with project technology licensors, and the FEED contract with Bechtel, using the first tranche of grant funds provided by the DfT.
Further drawdown of the grant would be subject to demonstrating project milestones, with matched funding requirements to be met over the two years to 31 March 2025.
Velocys said it had also appointed a "leading global investment bank" to advise on the financing of its reference projects, and to help obtain matched funding from private sector investors.
The company said it expected the funding to be in place during the fourth quarter of 2023.
"As previously announced, Velocys' cash contribution to the Altalto Project over two years from April, including its contribution to the first tranche of private funding of £1m, is not expected to exceed £8m, with Velocys intending to recover any funding it provides at the earlier development stages following receipt of third-party project investment," the board explained in its statement.
At 1238 BST, shares in Velocys were up 1.17% at 3.64p.
Reporting by Josh White for Sharecast.com.
