Noaman Al Adhami, Alfanar Projects: Lighting the way for 2G SAF

Noaman Al Adhami, UK Country Head at Alfanar Projects, is this week's guest on The SAF Podcast. 

He joins Oscar for a discussion into Lighthouse Green Fuels — one of the UK’s most closely watched sustainable aviation fuel (SAF) projects. We begin by looking at why Alfanar chose to initially focus SAF production in the UK and the decisions around site selection.

We then explore what it takes to develop a second-generation SAF project at scale, including the gasification and FT-SPK pathway, feedstock selection, carbon capture, project financing, and the role of the UK SAF mandate in creating the right conditions for investment. 

Noaman also explains why Alfanar is starting with biomass and agricultural residues, how the project could evolve towards more challenging waste feedstocks, the ongoing Carbon Capture application they have recently submitted and how the project has been financed to this point and future plans for financing project construction.

If you want to understand the real-world challenges of scaling advanced SAF production in the UK, this is an episode you won’t want to miss.

There is still time to submit your applications for the SAF Investor Deal of the Year Awards, we would love to hear from you about any financing deals that have taken place over the past year, your application can be submitted here: https://docs.google.com/forms/d/e/1FAIpQLScwrzV8VN8oqA6c-e0GMlgZmttTQ-U-1D9XxnOgeeQV-ITeiQ/viewform?usp=header

Transcript

Welcome And Guest Introduction

SPEAKER_03 0:10

And welcome to other representatives, Al Slafftalk Hallet, the only dedicated staff call called on the internet, probably on new tunneling. If anyone finds another one, do let us know. This week I'm really excited to be joined by Noman and Alani from AlphaNab project. No man is the UK country head for AlphaNab Project and working on the Lighthouse Green Fuject in the UK. So we're going to be having a deep dive into that and all the challenges and opportunities that presents. But Noah, thanks so much for joining us. How are you?

SPEAKER_00 0:54

I'm fine, great. Thank you for having me as well.

From Power Grids To Wind

SPEAKER_03 0:59

Excellent. It's great to have you on. So before we get into the details of Lighthouse Green Fuels, do you just want to give everyone a sense of your background and your career to date?

SPEAKER_00 1:13

Yeah, sure. So I'm um I'm a chemical engineer. Uh I have also an MBA. I started with uh I started uh with the power sector, the power generation uh sector with uh Alstom and then moved to uh electricity transmission and and distribution uh for around five to six or six years with the same company and then I moved to uh renewable uh energy uh generation uh of renewable power, mainly wind. I uh I was the head of um uh Vestas for Middle East for around four years, and uh yeah I was involved in in actually finalizing and building the first uh wind farm in Jordan and uh then around four more before I left and joined El FNR as a country head for El FNR to establish the business. Uh uh this move was in around Feb 2018. Yeah.

SPEAKER_03 2:30

You are in very good company as a chemical engineer with an MBA. I think every other guest we have on here is a chemical engineer with an MBA.

SPEAKER_00 2:39

Yeah, well, yeah, I mean, uh I think it's typical, right? I mean, uh energy transition, um, yeah.

How Alfanar Is Structured

SPEAKER_03 2:46

Um the more these I do, yeah, the more the more I realize it's it's the path um into into this into this space. For those that aren't necessarily aware, Alphanar Project sits within the wider Alphanar group. So could you maybe break that down a little and and how that structure works within the bigger group?

SPEAKER_00 3:13

Yeah, yeah. So Alphanar is a is a is a big group. Uh I mean it's privately owned. Uh the headquarters is in Riyadh. Um uh the group is divided into uh uh let's say around two main divisions. One is Alphanar Electric, and we are a very large um uh manufacturer of electrical equipment, so we manufacture um a wide range of products in in Saudi uh as well as uh uh internationally. We have factories in Europe, UK, um uh Italy, Spain, uh, Germany, uh as well as in India. Um yeah, so mainly, you know, mainly electrical equipment from cables, switch gears, control panels. Um up to wind turbines, we acquired SimVion India uh division. So we we um we also uh do manufacture wind turbines as well, part of our portfolio. Um so this is one division. The the second division is FNR projects, um uh where we or I at least belong to, and and this division is is mainly focusing on providing um engineering contracting um services. So we are the largest um power and electricity contractor in the Middle East. We have delivered uh a significant um, let's say, part of the grid in Saudi in terms of overhead lines, substations. Um, and we are continuing to grow and to offer these services um uh globally. Um and within LFNR uh projects is LFNR global development, which is the development arm of LFNR. Um and this uh yeah, this activity or this division is mainly focusing on developing renewable projects. So we we started around, I think around 12-13 years with developing our own portfolio of renewable projects. We started with with wind and and solar, and now we have uh around three gigas of a portfolio um um globally, mainly in Europe, the Middle East, and and in India. Uh the setup in UK um is a new vertical uh which we have established. This is based in UK. It's mainly um internally we call the process vertical, so it's mainly focusing on developing uh green fuels and um our focus uh we started um with a focus on SAT, and um uh that's why um Lighthouse Green Fuels Project uh is part of this division. But we want to do more, of course, of these projects. I mean, hopefully, after the successful delivery of lighthouse green fuels, I can call it phase one. We will have uh hopefully soon after uh other phases in UK and uh as well uh uh internationally.

Why The UK For SAF

SPEAKER_03 6:54

So how did, as you call it, the the process vertical come about and how did it end up being in in the UK? Because there's you're active over so many markets globally. How did you decide that the UK was the place to begin this this journey in the SAF and that aspect of renewables?

SPEAKER_00 7:16

Yes. I mean, first uh the UK is is uh is a very uh well-known country uh for oil and gas and and um providing engineering um and project management uh resources uh globally for uh for the oil and gas sector. So, for example, um you know the projects which are based in Middle East, um the oil and gas projects based in the Middle East are mainly served by by companies who are based in in UK. So the skills, um the knowledge is is available. Uh, and then of course um the second reason is is the ambitious and is the ambition to grow green fuels in the UK, you know, starting with the with the RTFO, and then of course the SAF mandate. I mean the UK is uh is actually not one of the leading, is the lead is the leading country currently when it comes to SAF. Um so yeah, I mean these are the main uh the main uh the main reasons. Now SAF is also unique because it's not only because of the the regulations and because of the ambition and the SAF mandate, but also UK is the third largest aviation hub globally, you know, so after US and China. So um, so it's uh yeah, it's it's uh there are several factors, uh, but I think these are the main ones.

SPEAKER_02 8:53

Yeah.

SPEAKER_00 8:54

Because also we have presence, you know. I mean our group, we we also have other companies in in the UK operating, so we know the market as well. So this was also another factor. Uh, you know, doing a new business in a country you already know um is um yeah, is helpful. Yeah.

SPEAKER_03 9:16

Yeah. So for those that don't know, I'm pretty sure most of our certainly UK listeners will be familiar with Lighthouse Green Fuels, but for those, the international listeners who might not necessarily be so aware, do you just want to break down what it is, what break what Lighthouse Green Fuels is and the full the scope of the project and the stage that you're at currently?

SPEAKER_00 9:47

Yes, sure. Um yeah, so the project name is Lighthouse uh Green Fuels, it's based in in Teaside. Uh currently is is the most advanced um second generation uh SAF project in in Europe and it is one of the largest in the world in terms of capacity. Um now the project is um is following the the SAF mandate in the way we uh we have structured this project, the UK SAF mandate. So um it's based on carbon scaling, so there's an incentive to reduce the carbon intensity of uh of uh of the final product, and we maybe will come into this subject later on. Um it's a development of more than two billion uh pounds. Um we uh uh we have secured a large uh uh site uh in in T-Side, and it is a fully integrated site where uh the full um uh supply chain is based mainly uh in the same on the same site and all the utilities and um yeah, all the utilities storage. Uh we will have our own uh key um to receive feedstock and uh and the whole process is based on the in the same in the same site. Um the project is following uh the uh uh an approved ASTM route to to produce SAF, which is the FTSPK route. So this is following um the gasification um Fisher Trop route to produce SAF. Um yeah, and uh currently we are uh uh as I mentioned, we are the you know the most advanced project simply because we are um um we are um uh completing the uh feed uh study with all the licensors on board in around one month time, and we are moving towards um the EPC stage uh of the project. Um and also the other development activities are are in um you know more in an advanced stage like the planning, permitting, uh feedstock supply, offtake, um and uh financing. So yeah, so we are hoping to uh realize the um this project and reach of ID as as soon as we we uh as soon as as soon as possible and also to um deliver the project and uh and start producing uh SAF. Of course, second generation SAF is is key for the UK, as you know, uh because of the uh cap uh on on HEFA, uh especially especially starting from 2030 up to 2040. Yeah, yeah.

SPEAKER_03 13:03

Why is it called lighthouse green fuels? Where did that name come from?

SPEAKER_00 13:08

Yes, uh interesting. Uh no, no, there's two reasons. Of course, it's a lighthouse because it's the it's an innovative, uh it's an innovative project, right? And uh um so this is one uh one uh uh maybe one reason, but there is um another important reason is because of uh alfanar name, and it's alphanar is an Arabic uh name of lighthouse. So uh al-Fanar means lighthouse. Um and uh yeah, so this was uh this was one uh I I think the main reason why we've called it um lighthouse green fields. Yeah.

Starting With Easier Feedstocks

SPEAKER_03 13:55

That makes that makes a lot of a lot of sense. And what what feedstock are you looking to utilize the project?

Testing And De Risking The Process

SPEAKER_00 14:06

Yeah, I mean feedstock is important, uh, and selecting the right feedstock uh to de-risk the technology, uh, because again, this is uh there is a a first of a kind element for all the um for all the routes to produce um uh second generation SAF. So uh the design of the project is is to handle solid wastes to uh to SAF, so it can take multiple um uh types of of feedstocks, but then we will start with a less challenging um uh feedstock, which is the with biomass uh feedstock um uh uh and agri and agri residues, uh, due to the fact that they come in um in a form which is easy to deal with when it comes to logistics, storage, uh, but also the composition is uh you know it's more homogeneous uh and um and we want to first uh de-risk the um the process itself, reach the uh guaranteed availability levels um once we start commissioning and maybe operating for one or two years, and then we will start later on um introducing um a more challenging uh uh feed stocks. It can handle a variety of potential feedstocks, more agri residues, uh waste uh waste wood, um uh even sewage sludge and uh and chicken litter. I mean, there is many uh MSW uh potentially, you know, but I cannot start with a very um, I mean the project by itself is very challenging, uh, and and it will cost a lot. So uh um we need to first um prove the the technology lineup, uh reach uh an operation uh you know, operation level which is close or within the guaranteed uh availability levels, and then we will uh start maybe with um you know uh incrementally introducing more more challenging um feedstock to the to the plant. It is in our advantage to use more local feedstock and and to diversify as well, because then you you know the more biogenic feedstock is there, it the more soft you can produce. So it's it's basically in our advantage to to do so. Yeah. Sorry.

SPEAKER_03 16:54

Yeah. How does how does that work? Because a lot of we I've spoken to a lot of um people that have worked on projects, and the the way the technology works with a certain feed stock, it doesn't necessarily behave in the same way with other feedstocks with slightly different characteristics, and then you have different issues with the technology that can present themselves. So the idea that you start with I'm gonna use sort of air quotes for the audio listeners, the easy feedstock and the biomass, and then the test the are you testing or just implementing different feedstocks? How does that adaptation to the variety of feed stocks you want to work with work? What does that journey into adapting all of those look like?

SPEAKER_00 17:43

Yeah, first it's of course we will not uh we will not risk it two billion plus projects by just randomly introducing different feedstocks, right?

SPEAKER_03 17:55

I mean, I think you should get a big spinny wheel, one of those sort of big wheels from my wheel of fortune, and spin it around, and that's how you hit your feedstock.

SPEAKER_00 18:04

No, it's uh no, no, there will be the the the testing uh campaigns which we we will we have to do, you know, and simulate that. There are uh um, you know, with the with the technologies which we have uh selected, uh they have facilities which are their pilot projects where we um basically uh test different types of feedstock and see the behavior of the whole uh uh let's say chain of processes afterwards, you know. So uh you know extensive testing uh on uh lab scale, and then we go on pilot scale before before we will decide if we will um introduce a more uh a more challenging um uh a more challenging uh feedstock. But the I mean it's simple, it's mainly contaminants, which could impact the the process. And the second is the physical properties, you know, because they are not they don't look all the same, right? So we need to uh we need to try our best to uh standardize that um with across the different types of of potential feedstock.

SPEAKER_03 19:16

I love it when anyone uses the word simple in this context. There's not no such thing as simple in SAF.

SPEAKER_00 19:27

Yeah, yeah, yeah. I mean it's uh yeah, I mean, again, uh I mean we we would like to also respect the guarantees which we are getting getting from our licensors because this is also another thing, you know, the licensors, the technology providers, they provide us with with a with a guarantee of performance based on based on a specific uh design envelope for the feedstock, right? Yeah, so this is also uh some we don't want to lose the gathering, you know, when you have uh yeah, yeah, when when when when you have an a new piece of equipment and you want to want this to last for long term, you better, you know, uh follow the manual, you know, which the some guy has provided you with, right?

SPEAKER_03 20:18

Yeah, it's like when you don't take your car for a service for a few years and then it all breaks and you think, why did it break? Yeah, and you've got to you know take it for its annual service and maintain it, and then it will then it will look after you as well.

SPEAKER_00 20:32

Yes, yes, sure. Yeah.

SPEAKER_03 20:35

So what every project has got its its its unique, its unique selling point is at the USP. So what's the USP for lighthouse green fuels? What makes it a unique proposition compared to other projects that you can look at in the UK, Europe, or even across the world?

SPEAKER_00 21:01

Yeah, I think there are there are two uh two unique points. I mean, um uh first is um first the you know this technology lineup, which is the FT SPK or the gasification route, I think we will be the first to um to prove this uh route to SAF. Uh hopefully if if everything goes as as planned, right? So uh you know, once we we we prove, and there is uh of course you you know very well in the UK there is uh nervousness about gasification uh due to the previous uh experience and and and projects. So we want to really uh prove uh otherwise, uh because you know, gasification in other uh countries are uh um daily business, you know.

SPEAKER_03 22:02

I mean who are you proving that to? Is it proving it to the government? Is it proving it to sort of everyday people? It's like who who do you feel you have to prove this the gasification pathway works for Safti?

Carbon Capture And Carbon Scaling

Pricing Pressure And Buyout Risk

SPEAKER_00 22:17

Yeah, because it has not been uh it has not been implemented yet uh as uh as I mean second generation uh is is is new right so uh the the the this route has not been proven on commercial scale refinery scale and we are doing a refiner scale um uh yeah I mean in terms of I mean of course there are many pilot uh uh uh scale uh uh let's say projects uh globally but on uh and on a biogenic of course you know I mean gasification I mean we we should also be uh uh clear that gasification works on coal for the last uh I don't know 10 decades or even more you know gasification I mean still some countries currently they use it to produce fuel you know coal gasification in in South Africa and um uh coal to uh to to to methanol and is there in China there are there are I think hundreds of projects in China use coal gasification to produce uh products but this uh use you know applying these technologies into uh biogenic feedstock to produce SAF is not yet proven and this is what we would like to um approve and then if if if this will be the case then this will open the door for more investors more developers like us to uh to basically use the same um the same route so this is one one thing which we believe is one of our responsibilities is yeah is to is is to is to focus on this route and and and prove that it works to to produce uh second generation SAF. I think the second unique uh the second unique thing which is associated with our project is uh is the low um uh or um much lower carbon intensity SAF which uh we could uh produce combined with uh with the carbon uh capture because the you know the the the gasification and FT route uh you know part of the process we we have to remove the CO2 the biogenic CO2 from the syngas before the um uh synthesis stage or the FT stage and and and if we capture the CO2 then um the carbon intensity for the SAF will um will reduce considerably now maybe this is not an incentive for other uh locations or regions or countries globally but in UK it is because as I mentioned earlier the SAF mandate is is is is carbon scaling and encouraging um the reduction of uh of the carbon intensity of the SAF basically produced yeah yeah and with the carbon capture aspects of the project you're currently in an ongoing application process for that aren't you with an expected result of that to come in in a few months time do you want to explain a little bit about that and the the importance that has for the project? Sure yeah yeah no I I mean it's a critical uh it's uh one of the critical requirements for the project um we uh of course uh I mean this has is public information that the application is open now uh by by DESNES for the uh for the um north and you know for the east cost cluster um carbon capture um we will apply uh and by the 10th of april and hopefully uh in case we will be uh successful we will know that maybe after three four four months this will allow this will allow us to um to reduce significantly the carbon intensity uh for the soft produced uh you know from in in very rough figures from minus 80 85 percent from the fossil equivalent to minus 200 uh percent um and this will allow us to generate more carbon certificates which will accelerate the decarbonization of the aviation sector in the UK which will allow us also to offer um a um a much better uh price uh for the certificate as well because we'll be we'll be producing much more of these certificates and yeah we yeah we and we also we are uh unsupported project for the carbon capture so we will not need subsidy this is also another nice uh addition so we we don't need any subsidy from the government we will on the contrary we will take care of the uh trans transmission and storage cost of the co2 um yeah so um yeah so there is a very nice uh match i can say i this i always say that and repeat it you there's a very nice match between uh how the staff mandate has been uh uh structured and uh also the availability of of of carbon capture um yeah in the UK yeah so you're gonna have and correct me if I'm wrong sort of dual revenue streams afterwards you're gonna have the the staff you're gonna sell staff to airlines but you've also got the carbon capture certificates which you can also sell to projects well or have I got that wrong no it's it's the same thing uh it's not there's none there's nothing you know the the the you will be able to to uh increase the number of uh carbon certificates you will get from the SAF mandate right based based on the uh ci or the carbon intensity of the SAF you know so in the uh I mean the the SAF mandate uh um way to estimate the number of certificates is there uh it's very very clear there is a carbon intensity factor this carbon intensity factor will increase uh by the you know uh what you know if you reduce the if you reduce the carbon intensity of SAF you are increasing the CI factor and then this will be a multiple you know you multiply it by the number of certificates and yeah so it's the same SAF carbon certificates uh just we will produce more um yeah with with reduct with if we reduce the the CI the carbon intensity of the SAF yes I want to ask a mildly controversial question potentially we're in a we're recording this again the backdrop of a a war going on ongoing in the Middle East there is a lot of pressure on airlines are we increasing jet fuel prices currently are we linked to the jet fuel prices because there is a lot of liquidity in the stuff we can modern element for methods for significant aspect can be funny and scroll to analyze elements to money rather than them just going for the cheap and alternative because they have to get a certain amount for the the mandate but they don't want uh by potentially staff that's more expensive than they potentially need to pay. Sure yeah yeah I mean it's to avoid the buyout price right in the yeah I mean the airlines are are are uh I mean their the main their main concern is that especially for second generation self is that it will not be available on time and then they you know they need to potentially um uh you know pay for the buyout yeah price you know so yeah but but what but again I mean what we are trying to achieve with the with the carbon capture is to um is to is to produce a competitive uh second generation uh staff in the UK and the cost of the uh I mean first producing more carbon certificates and then the the price per certificate to be um to be uh to be considerably lower than the buyout price.

Energy Security And North Sea Reality

SPEAKER_03 31:24

This is what is our target this is what we want to prove this is what we want to achieve um um and I think yeah I mean in case uh once we have certainty of uh our connection to the carbon cluster then um then we will be able of course to communicate uh mainly to DFT what was our um what will be our our our cost of um uh our the cost per per carbon um yeah uh certificate now the conflict yes of course I mean yeah I mean uh I think the the main thing out of this conflict is uh energy security is very important right I mean uh depending on others to um um to provide you with the feed uh with the yeah with the fuel is uh is not the preferred option and and also uh jet fuel has also a very specific thing as well because the you know the the shelf life of uh jet jet fuel is also not um not like other uh fuels you know so you need to consume it um um you know you cannot uh store it for very very long um uh periods uh so yeah I think I think we think uh of course in addition to the sustainability uh advantages and um and to reduce emissions uh the production of SAF uh specially utilizing local um uh feedstock will uh will uh will uh will contribute uh significantly to the to the energy security um uh and in this case uh this is what we are trying to achieve as well in the UK now of course also there is an element of bringing back the industry to the to the UK i mean I I mean um our project I think will be uh will be uh will be uh uh you know the first refinery built in the UK since the 1960s um so um and we we know as well that uh you know conventional refineries in the UK are uh are closing down uh currently so um uh I think I think this uh you know this this project will will prove the concept of uh basically bringing back the um bringing back the industry you know the the oil and gas industry in the UK and building new refineries and um once we are successful I'm sure others will follow um will follow the same yeah is there sort of is there an unintended consequence that with the energy security argument that's coming around a lot because of the the global situation that you could see there being a lot more domestic if we're in the talk about the UK a lot more drilling in the North Sea for example as opposed to commitment to developing domestic renewables so balancing that argument it's not necessarily a domesticating energy security instantly goes to renewables. There's still convincing in discussions and pitching you need to to do to actually ensure that energy security is still done with a renewable mindset, not just a wider where are we getting all our energy from and how much and making sure a lot of it is more of it's becoming renewable.

Financing Plan And Going To Market

SPEAKER_00 35:06

Yeah yeah well I I'm not sure how uh uh how true this argument is because actually the the the peak oil uh crude oil from the North Sea was uh there in the early 2000s you know and now the the production is declining because of non-availability of crude oil not only not because of drilling yes uh uh the there is an element of drilling because normally you know if the well is is there's not enough crude oil in the well then you cannot justify the drilling and so uh I I mean the yeah I mean the crude oil uh capacity or production from North Fee is declining and uh and today it's uh I think it's around um uh it's around uh one third of what it used to be in in in in early 2000s and then um and then it is uh supposed to also uh decline dramatically after 2030 due to you know uh due to uh non-availability of uh of crude oil and you you know what I mean so it's not necessarily uh a decision it's uh it's a fact that yeah that there will be no more reserves um of of of of crude oil so but again I mean um uh I mean we will not alone solve the issue right we uh you know we and others uh other other SAF projects will contribute to um to energy security and hopefully uh you know in the next uh let's say few decades then potentially when all routes to SAF are are proven uh and uh and more feedstock will be unlocked uh for production of SAF then of course a shift will maybe happen it's similar to to what we have seen in the um in the electricity or the power uh decarbonization or renewables you know I mean I I remember I was part of that 20 years before uh cost of solar and wind was uh maybe uh close to 10 times more than conventional and then in a certain time frame after 15 years uh uh you know the shift happened um with the with volume and scale yeah yeah which one's harder the solar and wind energy boom or the work you have to do now to develop the SAF market which one which one was more challenging um yeah the the the SAF is is gonna be more challenging because it is capital intensive uh and um you know the you know the the advantage of renewables where um you know it's very it's much more simpler you know I mean with wind and solar it's a plug and play uh almost um you know the the you have manufacturers who will supply and manufacture yeah the um you know producing stuff is a is a yeah it's a it's a it's a process it's uh uh you we you know we are converting uh phases you know from solids to gas to liquid after so it's much more um uh complex and much more uh capital intensive I think but then if there is the will and if there's the demand uh and and more feedstock will will be available then yeah it could potentially because these routes on I mean why I gave you the example of coal uh gasification to to to fuel or to liquids is because this is proven now I mean they I mean there are countries who are producing uh liquid fuels from coal and they are selling it and people are buying it you know so yeah so if I if I if I uh replace the feedstock with um with a biogenic feedstock and if I scale then potentially I could compete uh I don't see a reason why I cannot um compete as well with the uh with the conventional fuel yeah yeah you mentioned the capital intensity of developing staff projects how's lighthouse green fuel's been financed to date where's where's the money come from and where do you anticipate you will need to get future funding will you need to get future funding and if so where will that come from as you look to get into construction and commercial operations yes um yeah I mean kind of you know devx is uh is is heavy for such projects for sure uh and now I think we're we um we were uh or we are fortunate to have a a big group and the um as alphanar and and our group and the board are very keen on on um on moving ahead with uh with this investment and to support um this new uh vertical within the group um also we we um um as you may know as well we as a lighthouse green fuels we got um we got grants from uh from dft so we are the I think the only project who which was successful in all rounds uh related to SAF from GFGS to AFF1 and two and three uh few months before um so this this helped uh of course because then if I uh if I want to um to to get further funding from our um our board uh uh you know showing them that the that the UK government is also uh contributing to this risk and yeah this exposure will increase confidence for sure uh yeah so um in simple words we are self-funded uh uh up to a f I D. Um this project will follow the uh you know project finance so there will be lenders on board uh we will um uh you know we we will uh we will see if if there will be some equity um investors with us uh together we will continue we want to have a controlling share we want to be there during construction we want to operate it and and and um and basically uh yeah remain in the project yeah so when will you are you currently when will you start reaching out and sort of discussing with lenders about sort of post FID project finance and getting getting that through and finalized is that something that's ongoing now is it something that you need to maybe get a couple more steps along the line before you actually begin that process yeah no we started uh but but this year is mainly focusing on on on the advisors so we we we we we already uh appointed um uh a financial advisor um uh for uh for the for the debt we we we uh we are also uh appointing uh soon um the lenders advisors you know the technical advisor the uh you know off take uh feedstock advisors uh eHS and others uh to look into the project uh and and provide um provide the required uh reports now going to market uh before um understanding the um how the rcm is is is going to be structured um uh will uh will be and and and if our project will benefit from this rcm and uh uh you know is it's very important to get the certainty that our project will benefit from it and then how this rcm is structured then we could go um to the um you know we could go to the market uh so we are expecting to yeah to go to market uh we do our homework this this year and go to the market towards end of this year beginning of next year yeah um um uh we we we yeah we see Lenders are keen um you know to to be part of this journey. We we uh you know we you know lenders and banks are always uh uh trying to approach us and uh to understand more about the project.

SPEAKER_03 44:16

So this is a possibility. Do you have a rough idea about how much you're going to require? I mean, you don't you don't have to tell me an exact number, or is that something you're still sort of working out in terms of how much debt you're going to require from lenders?

SPEAKER_00 44:35

Yeah, I mean the gearing we will push for uh to maximize it, right? I mean, this is the best uh uh approach for project finance. Um now, if of course we the I mean we we think, and based on the advice we got from our financial advisor, that we could we could secure around uh 70 to 75 percent debt um uh for the project. Now there are there are uh um there are other uh uh mechanisms the debt, you know. I mean the involvement of ECAs, you know, uh NWF is is is maybe can play a role uh to uh you know for the bankability of the project. And um uh and we are exploring all all options.

SPEAKER_03 45:27

Um can you just uh explain ECAs and NWF what what those what those mean to those that potentially aren't so in the know?

SPEAKER_00 45:38

ECA, uh yeah, it's the uh export uh credit agencies um uh uh plus the and NWF is uh is National Wealth Fund, which was uh UK uh IV for the yeah awesome.

SPEAKER_03 45:53

So I want to change tax slightly and ask you what's the biggest factor that slows down that project development in your experience? What where where would the sticking points be? Has it been waiting for policy? Has it been finding planning permission? Has it been I mean, to this point, you guys don't have necessarily have the financing issue that potentially others have, because you've got in the very fortunate position of being self having self-funding up to this point. So for you guys, where's where's the sticking point or the biggest one?

SPEAKER_00 46:36

Sure. Yeah. Well, I mean, uh first of all, there is no perfect uh country in the world where you get everything you want, right?

SPEAKER_03 46:47

I mean it's a shame of planning to move there if you were gonna. I thought you were gonna tell me and I was gonna I was gonna book a flight.

SPEAKER_00 46:55

Yes. So this is just to start with, and we decided the UK, it was a it's not it was a good decision, right? Uh uh now, of course, there are things which we would like to see uh uh to see to be done better, especially based on our experience globally, being a global developer. Um yeah, I think uh policy certainty is uh um is important and and we uh we are always keeping the pressure to accelerate it. Uh unfortunately, what happened in in the UK is that the SAF mandate you know got legislated and the law, and then the RCM, uh there is around two years of time gap, uh you know, yeah, time gap between both. Um this is not helping because now we need to um we need to uh we can only uh close the project um once we hopefully uh be selected for the RCM and be a successful uh let's say people sign a sign a contract successfully. This is not the best situation for any developer because you know uh it's the last you know the most important thing you need for the project is the last thing you will get. Yeah, this is this is not good because then you are spending um all your uh devx uh and advancing the project. Um and we don't want to stop developing, you know, and waiting for the RCM because we've been I I cannot do that. I've spent a lot so far. We are 60 people in the UK. I cannot just decide to stop and wait until and also I want to honor the uh you know our commitment to the SAF mandate because now I want to, you know, I want to produce the SAF, uh, the second generation SAF by the time it is needed as per the SAF mandate. So so this is one part which uh unfortunately we are in this situation now and need to wait.

SPEAKER_02 49:05

Yeah.

SPEAKER_00 49:06

Uh uh now on planning permitting, we are following the DCO route. Um uh and uh yes, but this is common in in all European countries. Uh yeah, I mean compared to Middle East, we get things much quicker. Uh yeah in in Europe in general, or experience also not only in the UK, in Spain as well, when where we are developing a very large uh portfolio of wind and solar projects, but yeah, planning and permitting takes time. Now uh a third issue which uh um is a bit uh uh it's a bit uh specific maybe to the UK is the grid connection. Um yeah and the delays um in getting a grid connection. This is uh I think a big a big uh issue for not only SAF but for any uh project. When you ask for a grid connection and they tell you you can't get it only after 15 years, uh your business case is is is dead, you know, finished. So um yeah, I mean we know that the government is working on uh on this uh on this uh issue, and uh and uh hopefully soon uh there will be a new uh let's say new procedures to try to accelerate uh the grid connection because in the end, you know, for me, um I'll I decided to produce my own power at site. This will add into the capex, right? And then it will be reflected. But if if I get a grid connection, uh then this could save uh cost as well, uh in the end. And uh and there is no lack of of in UK, there's no lack of uh power generation, it's just the infrastructure is not there, right? It's really the the transmission and distribution. I mean, there is available uh power generation capacities, you know, it's just the you know the overhead lines, the substations uh situation is not uh is not uh there to support um project.

SPEAKER_03 51:27

It must be frustrating, frustrating because all those three three things you've mentioned are things that are outside of your control. And you're trying to develop this project whilst pushing against the the multiple objects that you don't necessarily have the overly an overly strong amount of control on, and you're trying to manage that whilst also uh mitigating all sorts of project risks and spinning thousands of plates. So it's a huge challenge operating in sort of in a landscape like that, where there are things that are outside your control that are the biggest time sap.

SPEAKER_00 52:07

Yeah, yeah, it is a big challenge, but the reward is is amazing if we are able to overcome these challenges. We are very much um focused on on producing SAF in the UK with the lowest carbon intensity uh possible. And uh and um yeah, um hopefully we will overcome uh all these issues. I mean, we I mean the government is is is giving us positive signals as well, so um this helps and and hopefully uh we'll overcome them yeah uh towards FID, which we are planning now by end of 2027.

SPEAKER_03 52:51

Final question Is there anything that was easier than you thought it was going to be?

SPEAKER_00 52:57

When I first started, and I I mean I started this business as uh the you know one person, and now we are uh we are around 60 and uh and uh and uh also increasing in the coming months. Um when I came here, everybody was talking about you know, you cannot find qualified, you know, resources very difficult, it's yeah, it's gonna take time. Um and I think this was not uh necessarily a uh a very big um challenge, you know. So we were able to get very and I'm very proud of our team, um who's working on this project. So I think this was yeah, I was uh I was when I came here first. Uh uh this is the first time I'm establishing a business in the UK, and and and this was my the worry everybody was telling me, and then I have realized it's uh not necessarily as difficult as I I was told at least.

SPEAKER_03 53:55

Fantastic. No best of luck with the carbon capture application, and it's been a pleasure for you to join us on the podcast.

SPEAKER_00 54:06

Thank you very much for your time. Thank you. And um, and uh hopefully this will be insightful for all understanding and