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NanoScent seeking new investor to complete blended funding round

NanoScent is seeking a new investor to satisfy the contingencies of a combined EUR 8m investment from existing investors and the European Innovation Council.

NanoScent, an Israel-based technology firm, is seeking a new investor to help solidify an equity investment from the European Innovation Council, CEO Oren Gavriely said in an interview.

To satisfy the contingencies of a combined EUR 8m investment from existing investors and the EIC, NanoScent must bring on a new investor at EUR 2m, Gavriely said.

The ideal investor will have complementary capabilities that can ramp up the revenue stream, Gavriely added. Producers and suppliers of gasses and chemicals for industrial use would make sense.

The money will be used to further develop the proprietary VOCID Purity in-line sensor controller, which measures hydrogen quality by monitoring the cleanliness of gas lines. The technology is oriented towards producers and end-users like fuel cell stations, who will be responsible for the integrity of the hydrogen. The product will be rolled out at the end of 1Q23.

Gavriely said the company has several customers for the technology in the pipeline, declining to say who they are.

NanoScent, founded five years ago, has raised USD 10m in equity to date, with another USD 10m in non-dilutive funding. The company’s largest outside investor is Sumitomo Chemical, which trades on the Tokyo Stock Exchange.

Control of the company is maintained by the founders, Gavriely said.

NanoScent has 20 employees, Gavriely said. So far the company has relied on the expertise of its board, which includes one former investment banker, for financial advisory services. That could change in the future as the company grows.

NanoScent uses Pearl Cohen for law services and EY for accounting.

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Shearman’s Dajani moves to Baker Botts

Mona Dajani has moved to law firm Baker Botts after less than a year at Shearman & Sterling.

Baker Botts has brought on Mona Dajani as a partner in its New York office.

She will become global co-chair of energy infrastructure and hydrogen and co-chair of the firm’s energy sector, according to a news release.

Dajani joined Shearman & Sterling in February of this year, following four years at Pillsbury.

Her global practice has involved representation of some of the largest blue-chip clients worldwide, according to the release. In her over 20 years of practice, she has led numerous energy, sustainability, and infrastructure deals, including on complex mergers and acquisitions/dispositions, project development, financings, joint ventures, restructuring, tax equity and tax credit financings involving energy and related infrastructure facilities in the U.S. and around the world.

The transactions she has led involve solar, wind, hydrogen, hydroelectric and geothermal, as well as ammonia, mobility, various energy deals with data centers, electric vehicles, carbon capture and sequestration, renewable natural gas, biofuels, net-zero technology and other energy transition projects.

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Capstone Green Energy CEO resigns

The resignation is effective August 22 and the board is initiating a search process to fill the position.

Darren Jamison has resigned as President and CEO of the publicly traded Capstone Green Energy Corporation, according to a news release.

The resignation is effective August 22 and the board is initiating a search process to fill the position.

Robert C. Flexon, Capstone Board Chair, was appointed as Executive Chairman of the board effective August 9, and was also appointed to serve as Interim President and CEO, from the effective date of Mr. Jamison’s resignation until a successor is named.

In connection with Mr. Flexon’s transition to Executive Chairman, Denise M. Wilson was appointed Lead Independent Director of the board. John J. Juric, who joined Capstone as Chief Financial Officer in March 2023, will continue to provide financial leadership for the company.

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HIF, Idemitsu, and MOL to cooperate on e-fuels supply chain

HIF Global will assess demand for CO2 in its eFuels production facilities around the world. Idemitsu will study the capture of CO2 in Japan. MOL will examine the transportation and shipping of CO2 from Japan and eFuels to Japan.

HIF Global, an eFuels company, Idemitsu Kosan, the Japanese petroleum company and Mitsui O.S.K. Lines, Ltd. (MOL), the international shipping company, have reached an agreement to develop an eFuels supply chain between HIF facilities and Japan.

The agreement also outlines how the companies will explore the potential for supplying carbon dioxide (CO2) from Japan for use as a feedstock for the eFuels production process in HIF facilities under development in the USAAustralia and Chile, according to a news release.

HIF Global will assess demand for CO2 in its eFuels production facilities around the world. Idemitsu will study the capture of CO2 in Japan. MOL will examine the transportation and shipping of CO2 from Japan and eFuels to Japan.

Cesar Norton, President & CEO of HIF Global, said: “At HIF Global, we are developing a portfolio of eFuels facilities that would recycle approximately 25 million tonnes per year of CO2, equivalent to the emissions from over 5 million cars. Carbon neutral eFuels are an immediate replacement for fossil fuels across the global transport sector. Initiatives like this collaboration will bring us a step closer to fueling our world with renewable energy as we strive towards net zero emissions now.”

Hiroshi Tanaka, General Manager (Carbon Neutral Transformation Department) of Idemitsu Kosan said: “As part of our commitment to sustainability, Idemitsu is actively working towards establishing a robust supply chain for eMethanol and eFuels. We recognize the importance of these low environmental impact alternatives in our business and their versatility. Through strategic collaborations such as this, we are confident in our ability to take a leading role in reducing carbon emissions in both the energy and transportation sectors. Additionally, we see tremendous potential in the development of various business opportunities within the supply chain. We look forward to exploring and capitalizing on these opportunities together.”

Hirofumi Kuwata, Senior Managing Executive Officer of MOL, said: “Mitsui O.S.K. Lines is pleased to be working with HIF Global and Idemitsu Kosan to develop a value chain for CO2, synthetic fuel, and synthetic methanol, contributing to decarbonization throughout the lifecycle. We will establish efficient maritime transport of CO2, synthetic methanol, and synthetic fuel within the supply chain connecting Japanese and overseas projects.”

The parties will also discuss the sale and purchase of eFuels and analyze the resulting greenhouse gas emissions reduction.

eFuels are made using electrolyzers powered by renewable energy to separate hydrogen from oxygen in water. The green hydrogen is combined with recycled carbon dioxide to produce carbon neutral eFuels, which are chemically equivalent to fuels used today and can therefore be dropped-in to existing engines without requiring any modifications.

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AEM electrolyzer startup conducting Series B capital raise

A maker of anion exchange membrane electrolyzers is undergoing a Series B capital raise.

Versogen, an electrolyzer startup, is conducting a Series B capital raise, with the aim of closing the round in the coming weeks, CFO Tim Krebs said in an interview.

The Delaware-based maker of anion exchange membrane electrolyzers is seeking to raise multiples of its Series A capital raise, Krebs said, which was a $14.5m round completed in May, 2022.

Proceeds from the Series B would allow the company to complete development of its AEM electrolyzer, a 1 MW modular hydrogen generation system, Krebs said. The company is not using a financial advisor.

The Series A funding round was led by Doosan Corporation and its affiliate HyAxiom. Other investors include The Chemours Company, TechEnergy Ventures, Wenstone H2Tech, TOP Ventures America, a CVC arm of Thai Oil Public Company Limited, DSC Investment and CN Innovations Investments Limited. 

Krebs, a former investment banker who has been the CFO of three energy technology companies, expects some existing investors will also participate in Versogen’s Series B round.

Versogen is led by co-founder and CEO Yushan Yan, an electrochemical engineer and inventor. The company touts a technology using low-cost construction materials like an alkaline electrolyzer but a more efficient production process akin to a membrane-based PEM electrolyzer.

Market dynamics

The capital raise is taking place amid a crowded field of electrolyzer startups looking to raise money in order to finalize designs and cement commercial opportunities.

Among others, Electric Hydrogen, a PEM electrolyzer startup, recently raised a $380m Series C; Verdagy raised a $73m Series B in August; and HyAxiom, a developer and manufacturer of fuel cell and electrolyzer solutions, completed a $150m private placement of convertible preferred stock in July.

At the same time, growth equity as well as Series A and Series B funding for climate tech dropped significantly through the first half of 2023.

Series A funding fell 36%, while Series B funding dropped 20% and growth equity investments fell by 64%, according to data from Climate Tech Venture Capital. Series C funding dropped by 72% in 1H23 compared to the same period last year, the same data shows.

Still, the market for electrolyzers is supported by undersupply as green hydrogen projects advance around the world.

James Bowe, a partner at King & Spalding who is advising on several large green hydrogen projects, said the three top manufacturers of electrolyzers are sold out for the next three to four years, potentially providing an opportunity for startups to fill the gap. Bowe made the comments yesterday during a panel at the Reuters North America Hydrogen conference in Houston.

Additionally, several catalysts for further electrolyzer demand are on the near-term horizon. The US Department of Energy is expected to announce the winners of up to $8bn in government funding for hydrogen hubs this week, while guidance from the IRS detailing rules to qualify for green hydrogen tax credits should be issued in the coming months.

Further clarity on government support for the hydrogen industry is expected to spur many projects toward final offtake arrangements and final investment decisions, experts say.

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Inside Intersect Power’s green hydrogen plans

California-based renewable energy developer Intersect Power anticipates huge capital needs for a quartet of regional energy complexes co-locating wind and solar with green hydrogen production in the Texas Gulf Coast, California and the American West.

Intersect Power, a solar developer that completed a $750m capital raise last year, is developing four large-scale green hydrogen projects that could eventually be spun off into a separate company, CEO Sheldon Kimber said in an interview.

Four regional complexes of 1 GW or more, co-located with renewables, are in development, he said. The first phases of those, totaling several hundred megawatts, will come online between 2026 and 2028.

Initial offtake markets include transportation, sustainable aviation fuel, and hydrogen for industrial use, Kimber said. Ultimately Intersect is aiming to serve ammonia exporters in the US Gulf Coast, particularly those exporting to Japan, Kimber said, adding that the company could contract with ammonia producers. He recently wrapped up a nine-day, fact-finding trip to Japan to better understand what he believes will be the end market for Intersect’s green ammonia.

“If you don’t know who your customer’s customer is, you’re going to get a bad deal,” Kimber said.

Intersects projects under development involve behind-the-meter electrolysis, co-located with Intersect’s wind and solar generation plants. In 2021 the company signed an MOU with electrolyzer manufacturer Electric Hydrogen. The contract is for 3 GW.

Intersect controls the land and is in the process of permitting the four projects, located in Texas, California and another western US location that Kimber declined to name. The primary focus now is commercial development of the offtake and transportation, he said.

‘Boatload of equity’

Kimber said the company will be ready to announced details of the projects when they are ready to seek financing. He estimates that upwards of $12bn will need to be raised for the package of complexes.

“There’s going to be an enormous need for capital,” Kimber said. Debt will make up between 60% and 90% of the raising, along with “a boatload of equity,” he said. Existing investors will likely participate, but as the numbers get bigger new investors will be brought on board.

Intersect has worked with BofA Securities and Morgan Stanley on past capital raise processes, and also has strong relationships with MUFG and Santander.

Moving forward the company could have a broader need for advisory services and could lend knowledge of the sector in an advisory capacity itself, Kimber said.

“The scope and scale of what we’re doing is big enough and the innovative aspect of what we’re doing is advanced enough that I think we have a lot we can bring to these early-stage financings,” Kimber said. “I think we’re going to be a good partner for advisory shops.”

In the short term Intersect has sufficient equity from its investors and is capitalized for the next 18-to-24 months, Kimber said. Last summer the company announced a $750m raise from TPG Rise Climate, CAI Investments and Trilantic Energy Partners North America.

“People don’t want to pay ahead for the growth in fuels,” Kimber said, adding that reaching commercial milestones will build a compelling valuation.

Intersect could spin off its hydrogen developments to capitalize them apart from renewables, Kimber said.

“Every single company in this space is looking at that,” he said. “Do you independently finance your fuels business?”

Avoiding the hype

Right now the opportunity to participate in hydrogen is blurry because there is so much hype following passage of the IRA, Kimber said. Prospective investors should be focused on picking the right partners.

“What you’re seeing right now is everybody believing the best thing for them,” Kimber said, noting that his company has decided to keep relatively quiet about its activities in the clean fuels space to avoid getting caught up in hype. “The IRA happened, and every electrolyzer company raised their prices by fifty percent.”

Of those companies that have announced hydrogen projects in North America, Kimber said he believes only a handful will be successful. Those companies that have successfully developed renewables projects of more than 500 MW are good candidates, as are companies that have managed to keep a fluid supply chain with equipment secured for the next five years.

“That is a very short list,” he said.

Lenders on the debt side will want to start determining how projects will get financed, and which projects to finance, in the next 18 months, Kimber said.

Finding those who have been innovating on the front-end for years and not just jumped in recently is a good start, Kimber said.

“Hydrogen will happen, make no mistake,” Kimber said. He pointed to the recent European directive that 45% of hydrogen on the continent be green by 2030 and Japan’s upcoming directive to potential similar effect. Once good projects reach critical points in their development they will start to trade, probably in late 2024, he said.

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Hydrogen firm launches equity raise

A US hydrogen infrastructure and project development outfit has mandated a banker to conduct a raise for equity and project capital.

Lifte H2, the Boston-based hydrogen infrastructure and project developer, has mandated a banker to conduct a Series A capital raise, according to two sources familiar with the matter.

Energy & Industrial Advisory Partners is running the process, which launched recently, the sources said. Lifte H2 is seeking equity in the topco and development capital for its first project.

Talks with strategic and financial investors are being conducted now.

Lifte H2, which also has offices in Berlin, is led by Co-founder and CEO Matthew Blieske, who served as global hydrogen product manager for Shell before starting Lifte H2 in 2021. The founding team also includes Jeremy Manaus, Angela Akroyd, Richard Zhang, Paul Karzel, and Richard Wiens, all of whom previously worked at Shell.

In January, the company launched two hydrogen transport and dispensing products, the MACH₂ Mobile Refueler, which is a combination dispenser and high-capacity trailer; and the MACH2 High-Capacity Hydrogen Trailer, which has a capacity of 1,330 kg at approximately 550 bar and, according to the company, enables the lowest cost per kilogram for over-the-road transport.

The company signed an MOU last year with Swiss compressor manufacturer Burckhardt Compression to develop a joint offering of hydrogen solutions.

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