State-backed Export Finance Norwaywill provide guarantees for Aker Carbon Capture recently announced contract to supply five ACC Just Catch units, additional equipment such as liquefaction systems, and temporary CO2 storage and on-/offloading facilities for two sites in Denmark. The contract, with leading Danish renewables company Ørsted, is worth over EUR 200m in total. The guarantees mark Eksfin’s debut in the carbon capture and storage segment amid a burgeoning global market for Norwegian climate technology.
Aker Carbon Capture has been awarded contracts to deliver carbon capture to Ørsted’s wood chip-fired Asnæs Power Station and the Avedøre Power Station’s straw-fired boiler, both part of the Ørsted Kalundborg Hub. The five Just Catch carbon capture units will have a combined installed design capacity of 500,000 tonnes of CO2 per year.
Joint guarantees by banks and Eksfin
In order to secure contracts, Norway-based Aker Carbon Capture is frequently requested to provide bank guarantees covering equipment deliveries, contract fulfilment and security for advance payments. Aker Carbon Capture’s banks can either cover this risk alone or reduce it by obtaining state-backed guarantees from Eksfin, the Norwegian export credit agency.
Eksfin has collaborated with DNB, SEB and Swedbank to create a guarantee framework covering Aker Carbon Capture’s contract fulfilment, advance payments from customers and other instruments that Aker Carbon Capture can extend to future Norwegian and foreign purchasers of its solutions. Aker Carbon Capture will utilise the new guarantee framework for the first time in relation to the Ørsted project. The guarantee framework totals approximately NOK 650 million.
Eksfin support is important for Aker Carbon Capture
“We are frequently requested to provide guarantees for export contracts. To meet these demands, Eksfin’s additional risk capacity allows Aker Carbon Capture to meet international customers’ expectations at competitive terms in the growing carbon capture industry”, said Egil Fagerland, Chief Financial Officer at Aker Carbon Capture.
“We are delighted on Aker Carbon Capture’s behalf for securing this important contract. This is the first carbon capture project Eksfin has supported. Going forward, we aim to develop additional financing solutions together with commercial banks that serve our dual national goal of increasing exports and reducing emissions”, said Eksfin CEO, Ms. Tone Lunde Bakker.
Robust outlook for decarbonization solutions
To reach the targets of the Paris Agreement, carbon capture and storage must be part of the solution, according to the Intergovernmental Panel on Climate Change (IPCC). The carbon capture market is both global and fast-growing, as countries and companies accelerate their plans to decarbonize and carbon pricing mechanisms become more prominent. The International Energy Agency (IEA) estimates the need for 1.2 gigatons CO2 capture per year by 2030, and 6.2 gigatons per year by 2050. This represents a substantial increase from the current operational carbon capture, usage and storage (CCUS) capacity of 43 million tons per year.
“Increasing exports of Norwegian climate-related technology is one of our strategic priorities at Eksfin. Our flexible range of guarantees and loans are available to both Norwegian export companies and buyers of Norwegian goods and services who can also rely on our experience and collaborative approach to create the right tailored solution,” said Lunde Bakker.
