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The scope of the project comprises two demonstrator Generation 4 reactors for producing multi-walled carbon nanotube material (MWCNT) and synthetic graphite for EV batteries, as well as related corporate research and development. This enables the company to build the commercial scale of production and achieve economy of scale.
The project is eligible under the Bank's policy objective "Research, innovation and digital" of the Public Policy Goal "Innovation, Digital and Human Capital" as it concerns the development and demonstration of an innovative advanced manufacturing technology in Europe for the production of a critical raw material. The project contributes to the development of the EU-based battery industry, for which it can be considered an enabler. Due to its enabling character for the transition to e-mobility the project fully contributes to Climate Action (mitigation) objective. It meets the objectives of the Green Deal Industrial Plan proposed by the European Commission. The project, as a demonstration project, has high policy impact. It contributes to (i) carbon emission targets of the Fit for 55, (ii) Critical Raw Materials Act, and (iii) Industrial Carbon Management Strategy. The project is located in a Transition Region and contributes to the Bank's Cohesion policy.
The operation falls under the Invest EU eligible policy areas of Research, Development and Innovation as it concerns an innovative project for i) substituting primary and secondary critical raw materials for sustainable, low and zero emissions alternatives, as well as, ii) individual elements of the Carbon Capture, Utilisation and Storage ("CCUS") chain.
The Project addresses these market failures:
(a) It has the nature of a public good for which the company ("Up Catalyst", the "Company", the "Borrower") cannot capture sufficient financial benefits; and
(b) It generates externalities which the Company fails to internalise. The financing also addresses the market failure of insufficient investment in a transition region, thus supporting the strengthening of the EU's economic, social and territorial cohesion.
The Project's external benefits are potentially high as it contributes to the establishment of an industrial value chain in Europe of a competitive innovative technology to eventually produce a critical raw material. The Project will lead to important knowledge development, job creation and deployment of advanced manufacturing activities in Europe. The Project will furthermore help the development of a cleaner and more sustainable industry in Europe and lead to lower emissions of pollutants (health benefits) and CO2 (climate benefits).
The equity-type venture debt that the EIB provides is complementary to the Company's equity financing and provides a flexible structure adjusted to the investment needs of the Company (i.e. long tenor, deferred interest, etc). In addition, the presence of the EIB provides for a signalling effect to potentially crowd-in further investment.
The EIB would not be able to provide such type of financing support during the period in which the EU guarantee can be used, or not to the same extent, without InvestEU.
Final beneficiaries will be requested to comply with applicable national and EU legislation, as appropriate.
Final beneficiaries will be requested to comply with applicable national and EU legislation, as appropriate.