Estonia: #InnovFin: EUR 12 million loan from EU to clean tech company Elcogen

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  • EUR 12 million quasi-equity facility for further research and development, supported by the European Commission under the InnovFin programme.
  • Very first InnovFin support for a company in the Baltics provided by the EIB; financing will enable Elcogen to bring its highly efficient fuel cell technology to the market.

The European Investment Bank (EIB) has signed a EUR 12 million quasi-equity loan facility with Estonian company Elcogen in Ülemiste city (Tallinn) today. The loan is the first in the Baltic countries to get support under the InnovFin – EU-finance for innovators programme, which is financed from the EU’s Horizon 2020 research and innovation programme. Specifically, the financing falls under InnovFin’s Energy Demonstration Projects (EDP) facility.

The goal of the financing is to aid in the set-up of a demonstration manufacturing plant for cells and stacks used in solid oxide fuel cell systems, creating highly skilled local jobs in the process. The financing enables the company to invest in the research and development of fuel cells, to increase production volumes and to start its mass-manufacturing processes. This provides Elcogen with the opportunity to bring competitive fuel cell-based electricity and hydrogen solutions to the mass market and meet the growing demand from customers, including leading industrial companies in both Europe and Asia.

The EIB’s Vice President Alexander Stubb commented: “This project is the result of years of extensive research, both internally and in collaboration with leading universities and institutes. Elcogen has managed to come up with one of the most efficient fuel cell technologies around, and I think it’s only logical that the EIB and InnovFin should support such European innovators – to keep and support this know-how within the European innovation ecosystem.”

Elcogen’s CEO, Enn Õunpuu, said: “We have proven to our customers that fuel cells developed in Estonia, in cooperation with leading European research institutes, are the most efficient in the world. The EIB loan is an important milestone in bringing our technology to the mass market. In three years’ time we see ourselves as the world’s leading producer of fuel cells, because this is the only way that our customers will be able to provide affordable and innovative energy solutions to end users.”

Carlos Moedas, European Commissioner for Research, Science and Innovation, said: “This deal with Elcogen is a good example to show that the future of innovation is science-based. We are now making headway in the transition to a resource-efficient and climate-resilient future and we need to bring more ideas like these to market with the help of EU funding.”

At completion, the Elcogen plans to manufacture approximately 2 million cells per year, accounting for an electrical capacity of 50 MW. The fuel cell technology that Elcogen has developed converts a range of fuels, mainly hydrogen and biogas, into electrical energy with a very high electrical efficiency compared to other commercially available fuel cells.

Elcogen’s patented technology has the potential to become less expensive than competing technologies as it uses standard processes and widely available materials in cell manufacturing. Key applications for the systems using this type of fuel cell technology are residential power generation systems, industrial power generation units and further off-grid power generation.

Background information:

Founded in 2001, Elcogen is an Estonian manufacturer of the world’s most efficient fuel cells. The company has developed the next generation of fuel cells, delivering the market’s most efficient solid oxide cell technology suitable for electrolysis and fuel cell operation, while also solving key issues around cost, scale and lifetimes. Prior to this EIB loan, Elcogen had already raised EUR 18 million from private investors and public funds. In addition to the EIB loan, Elcogen intends to continue to raise equity capital from new and existing investors in the near future.

Fuel cells are a new generation of clean energy generation technology that makes it possible to generate electricity without the need for internal combustion. The production of electricity through fuel cells is significantly more efficient, does not release polluting substances and is safe. In addition, fuel cells can produce “green” hydrogen, which will play an important role in the future of energy storage. Fuel cell technology is at the heart of a European and global energy strategy aiming to reduce the use of fossil fuels and limit CO₂ emissions.

InnovFin Energy Demonstration Projects provides loans, loan guarantees or equity-type financing typically between EUR 7.5 million and EUR 75 million to innovative demonstration projects in the fields of energy system transformation, including renewable energy technologies, smart energy systems, energy storage, carbon capture and storage/use, and hydrogen and fuel cells, helping them to bridge the gap from demonstration to commercialisation. The facility is implemented directly by the EIB and has been established under Horizon 2020, the EU Framework Programme for Research and Innovation (2014-2020).