Essar Energy transition fuels secures $650 million in financing, hails UK govt's backing of HPP1 project

Essar Energy Transition (EET) Fuels, the owner of the Stanlow refinery, announced that it has successfully secured $650 million in receivable financing and trade credit financing facilities this quarter. 

The new funding includes a $150 million receivable facility with ABN AMRO Bank, an extension and increase of the HCOB and UMTB facility to $200 million for receivable financing, and a $300 million trade credit financing agreement with an international oil company, according to an official press release issued on October 3.

These facilities are designed to enhance EET Fuels’ strategic and financing partnerships, particularly with major European banks and established trading partners. The funding will also support the development of customer offerings and bolster relationships and sales volumes, further strengthening EET Fuels’ balance sheet. 

“This is a fantastic outcome for EET Fuels. With the backing of significant financing partners for our decarbonization strategy, we can continue to invest in and grow our business with confidence,” stated Satish Vasooja, CFO of EET Fuels. 

Tarun Naruka, head of corporate and structured finance at EET Fuels, added that these new facilities will enhance the company’s financial flexibility and strengthen its balance sheet. 

Meanwhile, Essar Energy Transition welcomed UK government’s support of its HyNet cluster. EET Hydrogen, a division of EET, is developing the first large scale, low carbon hydrogen production hub in the UK at its site in Stanlow. This hub will produce 1,350 MW of hydrogen capacity in total and capture around 2.5 million tonnes of carbon per annum – equivalent to taking 1.1 million cars off the roads, the company said in a release.  

The EET Hydrogen hub will enable regional industrial and power generation businesses to decarbonise by switching from fossil fuels to low carbon energy. The low carbon hydrogen will be used locally by EET Fuels’ Stanlow refinery and other major manufacturers in the region, including Encirc, Pilkington and Tata Chemicals to create the first low carbon refining operations, glass and chemicals manufacturing sites in the world, the release added. The EET Hydrogen hub will help to secure and grow vital industries, create jobs and unlock billions of pounds of related investment. 

EET Hydrogen will develop the hydrogen hub in two phases, with the first plant (HPP1) at 350MW capacity, the second (HPP2) at 1,000MW capacity and an overall target capacity of 4,000MW+ by 2030.  EET Hydrogen expects to begin construction of HPP1 in 2025, with low carbon hydrogen produced at the site by 2028. 

Green energy push 

Tata Steel and Essar are both involved in the UK's energy transition at Stanlow, a refinery and terminals complex that supplies fuel, energy, and storage for the region and beyond. 

Tata Steel is investing in a green steel project at Port Talbot, which includes a £750 million investment and a £500 million grant from the UK government. The project will include an Electric Arc Furnace (EAF), a new coil box, and a crop shear for the hot strip mill. Tata Steel is also investing in research and innovation in materials science with two new Centers of Innovation & Technology. 

Essar acquired Stanlow in 2011 and has invested over $1 billion in the refinery. Essar is committed to decarbonizing the UK economy and has plans to build a green energy industrial cluster at Stanlow.