Vulcan Energy secures full funding for geothermal lithium project in Germany
Vulcan Energy has made a Final Investment Decision on Phase One of a lithium and geothermal project in Germany after securing a EUR 2.2 billion funding package.
Vulcan Energy has secured a comprehensive financial package of approximately EUR 2.2 billion from various sources which will fully fund the construction of Phase One of the Lionheart lithium and geothermal energy project in the Upper Rhine Valley in Germany.
With this, the company has made a Final Investment Decision on Phase One of the Lionheart project and project execution is due to commence in the coming days.
Phase One Lionheart involves the construction of an integrated and renewable energy project that aims to produce 24,000 tonnes of lithium hydroxide monohydrate (LHM) for 500,000 electric vehicle batteries per annum, as well as 275 GWh of power and 560 GWh of heat over an estimated 30-year project life.
The facilities to be constructed will include a Lithium Extraction Plant, a Central Lithium Plant, geothermal production wells, supporting facilities, and ancillary infrastructure. The first commercial LHM production is targeted to start in 2028 following a 2.5-year construction period.
A blended financing package
The financing package represents a combination of different financing tools and supporting agencies and financial institutions.
- €1.185 billion in senior debt funding from 13 financial institutions including the European Investment Bank, five Export Credit Agencies, and seven commercial banks
- €204 million in German government grants (including a previously announced €104 million grant)
- €150 million equity investment in Vulcan Energie Ressourcen GmbH by the KfW Raw Materials Fund corresponding to 14% interest
- €133 million investment by a consortium of strategic investors including HOCHTIEF, Siemens Financial Services, and Demeter to acquire 15% equity interest in the Phase One Lionheart project entity
- €528 million in proceeds from the underwritten component of an equity raising by Vulcan at €2.24 per share
“Securing this financing package and taking a positive FID is a significant achievement in the history of Vulcan Energy. It will allow the Company to transition from development phase into execution phase with the construction of the commercial scale supply chain for Lionheart,” said Cris Moreno, Managing Director and CEO of Vulcan Energy.
“A lighthouse project for Europe, Lionheart is set to redefine lithium production, delivering Europe’s first fully domestic and sustainable lithium value chain. It will also provide a clean and reliable source of renewable energy for local communities and industries in Germany’s Upper Rhine Valley.”