Vulcan Energy (ASX: VUL, FSE: VUL) has announced the signing of a €879 million conditional debt commitment letter with Export Finance Australia (EFA) and a group of seven commercial banks. This financing is a significant step towards funding Phase One of the Lionheart Project, a key component of Vulcan’s plans to provide integrated lithium and renewable energy solutions in Europe.
Key Highlights:
- Debt Commitment: Vulcan has received €879 million in conditional commitments for the Lionheart Project, including €120 million from EFA and contributions from seven commercial banks.
- Total Debt Requirement: Vulcan is targeting a total debt package of approximately €1.5 billion – €1.6 billion for the project, with additional participation expected from Export Development Canada (EDC), Bpifrance, and SACE.
- European Investment Bank (EIB) Participation: The European Investment Bank (EIB) has also approved its participation, reflecting the importance of the project to Europe’s energy transition and critical raw materials supply chain.
Debt Funding Details:
- Debt Commitment Letter: The commitment letter formalizes the participation of EFA and the commercial lending group, which includes four Structuring Banks—ABN AMRO, ING, Natixis CIB, and UniCredit—as well as three additional international project finance banks.
- Terms & Conditions: The debt commitments are contingent upon several factors, including due diligence, final approvals, and the completion of legal documentation.
Project Funding Requirements:
- Total Project Funding: Vulcan estimates the total funding requirement for the Lionheart Project at approximately €2.2 billion, with €1.4 billion earmarked for capital expenditure.
- Capital & Financing Breakdown: The funding will be a combination of debt at the project level and equity financing at both the project and company levels. The total funding will include financing costs, contingency amounts, owners’ costs, and other related expenses.
Project Importance:
- The Lionheart Project is critical for the European energy transition and the electric vehicle (EV) supply chain, with Vulcan positioning itself as a leader in integrated lithium and renewable energy production.
- The involvement of multiple Export Credit Agencies (ECAs) and commercial banks reflects strong support for the project, which is seen as a cornerstone in Europe’s efforts to secure critical raw materials.
Next Steps:
- Vulcan will continue discussions to finalize the debt financing package, targeting first half of 2025 for completion.
- The company aims to maintain momentum in securing additional financing and keeping shareholders informed of further developments.
Commentary:
Felicity Gooding, Vulcan’s Group Chief Financial Officer, highlighted the strong support from financial institutions and government-backed agencies, emphasizing the project’s integrity and its critical role in the European renewable energy and lithium supply chain. Vulcan looks forward to completing the financing process in the near future.
