IdunnH2 is preparing for an EUR 18.5m fundraising process to support front-end engineering design (FEED) of its 300 MW Icelandic e-SAF facility, CEO and co-founder Auður Nanna Baldvinsdóttir told NPM.

A smaller, EUR 2m funding round is already underway to facilitate final testing ahead of the FEED.

Acting as financial adviser, EY is leading both funding rounds.

Baldvinsdóttir said: “For the first funding round, we have everything ready…EY is going to be sending the investment materials out very soon and hopefully we’ll be closing that within a few weeks.”

The developer has less clarity on the timeline for the larger process, but Baldvinsdóttir said the company will spend the next few months preparing for the FEED, hoping to launch this autumn.

Following this, IdunnH2 aims to reach an FID by the end of 2026.

“This is, of course, provided that all of a sudden everything starts going according to plan,” said Baldvinsdóttir. “It hasn’t up until this point, yet we remain optimistic.”

She added that what’s held back the developer’s timeline so far has been access to financing.

Baldvinsdóttir said: “We have project fundamentals that I think are a lot better than projects that we’re competing with for this development financing, but it’s been real tough going getting interested investors to, first of all look at Iceland, and then finding that niche investor that has the patience for an infrastructure project…but with the risk appetite of a venture fund.

“Because, we’re putting several modules together and although each of these modules is essentially TRL 8 or 9, they’ve never been put together at this size. So you’re looking at an integration risk, you’re looking at a market risk, you’re looking at all types of risks associated with large projects like this.”

However, Baldvinsdóttir noted that the situation is improving, particularly thanks to clarity on potential funding routes for these types of projects, such as specialised funds.

Capex expectations

Construction of IdunnH2’s e-SAF facility is expected to take two years, and after a FID, production is scheduled to begin in late 2028 or early 2029.

Baldvinsdóttir did not disclose specific capex expectations for IdunnH2’s project, but highlighted public projected figures of around EUR 800m for the facilities.

However, she added: “When anybody gives you this type of number the biggest issue for us, being a small developer in Iceland, isrealistic budgeting,especiallyregardingelectrolyser priceswhich are allover the place. It’s not like there’s a 30% difference between suppliers. There’s a three-fold difference between suppliers. So really it’s difficult toprovideany type of certainty on what the capex is, until [we’re] moving into that procurement stage.”

According to Baldvinsdóttir, the wide range in variation is due to different offerings put forward by electrolyser suppliers.

“Sometimes you get more of a complete package from these suppliers, other times they’re just selling the electrolysers, so you need to be careful about what equipment is included in these specs,” she said.

There is additionally a difference based on the origin of electrolysers. For example, Chinese electrolysers are less expensive than those from Europe.

“But then you have to consider things like the export credits,guarantees, and maintenance contacts, sothere’s a lot of advantages too to working with European suppliers,” said Baldvinsdóttir. “So for us this is the task ahead; getting more certainty on these types of incredibly important cost estimates.”

Offtake plans

Once operational, IdunnH2’s e-SAF facility will produce circa 70,000 t/y of sustainable aviation fuel.

Through MoUs, the developer has almost sold-out on future stock, including through a 45,000 t/y agreement signed with Icelandair, the country’s largest airline.

Baldvinsdóttir said: “I think the reason why this has gone well for us is because the most important determinant in the fuel price is the power price, and we are developing a project in a very low electricity price area – probably one of the cheapest areas in Europe for green power. And on top of that, we benefit from a lot of these exemptions and subsidies that are being offered through the RefuelEU aviation package.”

Part of the EU’s Fit for 55 package, RefuelEU promotes the supply and uptake of sustainable aviation fuel in the EU.

While the e-SAF project as a result has a profitable business case, its still has potential hurdles to face.

Baldvinsdóttir said: “Once we can close [the current funding] round we can get started on presenting this project to the public, [and] we can finalise the tasks that we need to finalise in order to be ready for FEED.”

She highlighted that a positive reception by the public is critical, as this could make or break the large infrastructure projects, noting that Carbfix was recently forced to abandon plans for its Coda Terminal, a cross-border carbon transport and storage hub in Iceland, due to local opposition.

“Iceland is very much like therest of theNordics, in that if you don’t have the public with you, your project can just sort of disappear,” said Baldvinsdóttir. “We don’t want that to happen to us.”

To that end, IdunnH2 has a local stakeholder group that includes local municipalities, through which it hopes to achieve a more positive outcome once it gets to the stage of presenting to the public.

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