ITM Power raises £250 million to boost electrolyser output

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Investors have jumped at the chance to pump £250 million into clean hydrogen and storage firm ITM Power, funding it to raise output of patent-protected electrolysers to 5GW by 2024.

Interest from institutions and gas giant Linde, its German partners and investors, led to an accelerated one-day float managed by the Sheffield-based firm’s advisors Investec and Merrill Lynch being oversubscribed, the firm told AIM investors this morning.

In January the start-up led by Dr Graham Cooley opened what it claims is the world’s biggest electrolyser factory on Peel Logistics’ Bessemer Park in the city. The firm manufactures high capacity devices, featuring technology known as PEM, or Proton Exchange Membranes.

The method electrolyses green hydrogen on a client’s site, using renewable electricity and standard tap water.  The firm claims its PEM implementation is widely scalable, producing machines ranging from 600kW up in theory to 100MW.

Also in January 2021, ITM received an order for the world’s largest PEM electrolyser of 24MW from Linde, its German partners and since January 2020 investors in the British firm.

The pair’s joint venture focuses on delivering renewable hydrogen to large-scale industrial projects worldwide. In 2020 ITM had signed a deal to deploy 10MW of electrolysers at Shell’s specialist Refyne hydrogen refinery in the Rhineland.

The Yorkshire firm’s wholly owned subsidiary ITM Motive builds and operates hydrogen refuelling stations in the UK. It aims to be the leading operator in the UK, with a hundred fuelling stations operating by 2026.

Accompanying yesterday’s accelerated capital raise, the firm published an exceptional trading statement for the three months to August. Slowing cash burn of £5.3 million over the quarter contributed to a cash balance up £130 million, year on year. Losses at the EBIDTA level were effectively unmoved, at £5.2 million.

The raise expands the firm’s equity base by a nominal 11.4%. Existing investors’ technical short-term reaction was to mark the shares up to 5% lower by mid-afternoon, valuing the firm at £2.13 billion.

Last November ITM completed a £172m fundraising, including a £30m investment by Italian infrastructure engineers Snam. Among clients and collaborators, Cooley boasts Sumitomo, Ørsted, Scottish Power, Siemens Gamesa, Cadent, Northern Gas Networks, RWE, Engie, GNVert, Toyota, Hyundai and Anglo American.

In June ITM announced an order book of 290MW of electrolysers, comprising £35.4 million of projects under contract and in progress, plus £118.6 million more in the final stages of negotiation or subject to preferred supplier status.

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