In an update provided yesterday by Avantium, a leading company in renewable chemistry, the company announced that it had secured conditional funding of in total 95 million euros ($115 million) of the 150 million euros ($181 million) target for its flagship plant in Delfzijl, the Netherlands.
The previous mark stood at 85 million euros ($103 million). However, among other things, Avantium has now signed a term sheet with engineering company Worley for the latter to make a 10 million euros ($12 million) equity investment in Avantium RNP, a subsidiary of Avantium. This investment has been structured as a contribution in kind, aligning the economic interests of both parties in the execution phase of the furandicarboxylic acid (FDCA) flagship plant.
Also, Avantium RNP is actively discussing debt and equity financing with banks and other parties and has applied for support from national and EU instruments — such as the EU Innovation Fund — for funding.
Avantium is exploring multiple financing options to provide for its investment commitments to Avantium RNP.
The planned FDCA flagship plant would produce 5,000 metric tons of FDCA per annum, the key building block for polyethylene furanoate (PEF), 100 percent plant-based, fully recyclable biopolyester. Avantium will not be installing any polymerization capacity at Delfzijl. Avantium RNP and global specialty polyester supplier Selenis have agreed on the principal terms for a multi-year commercial FDCA polymerization agreement.
The front-end-engineering and design (FEED) phase of the flagship plant is in the final stages.
Avantium has already signed the first two conditional offtake agreements for the supply of PEF resin to manufacture food packaging for bottles and films. This represents approximately 20 percent of the flagship plant FDCA production capacity. These conditional offtake commitments are subject to a positive FID, financial closing, other approvals and party-specific conditions.
In the update, Avantium said that the global pandemic was causing delays in the negotiations with its financial, commercial and other strategic partners and that the company will need more time before being able to give the go-ahead for the plant’s construction.
The focus is currently on meeting the key conditions required to make a positive Final Investment Decision., said CEO Tom van Aken. These include: securing the full €150 million in financing; obtaining offtake commitments for approximately 50 percent of the capacity of the flagship plant; and finalizing the engineering and ensuring the supply chain is in place.
More information will be provided, including a further update on the FID, on March 24, the date the company will publish its 2020 Annual Results.