Pure Hydrogen obtains $125 million in funding to help drive further success

Just weeks after signing a significant contract for the supply of its hydrogen powered vehicles, clean energy specialist Pure Hydrogen (ASX: PH2) has inked an agreement for $125 million in funding support for its rapidly developing business.

The funding facility agreement with Australian financier Monard Capital will allow Pure Hydrogen to purchase a stable of hydrogen fuel cell (HFC) trucks, vehicles and equipment which can then be rented to approved customers, inclusive of service and hydrogen supply.

Subject to a successful accreditation process, the facility is expected to be available to credit approved customers from early 2024.

HFC take-up compelling

Pure Hydrogen managing director Scott Brown said the new capital injection is helping make the take-up of HFC trucks compelling from both an emissions and capital standpoint.

The new funding injection, which is expected to kick on in early 2024, will provide the company with the opportunity to provide a range of options for the supply of trucks.

Pure Hydrogen is planning to create a special purpose entity to house the rented assets which will be made available to customers by the vendor on minimum 3-year terms (to a maximum of 10 years).

Rent and purchase option

Customers will have an option to return the assets at the end of their rental agreement period or exercise an option to extend the rental term.

“We’re delighted to be advancing our funding initiatives through this new agreement which will provide an initial $125 million financing facility, enabling Pure to rent our hydrogen fuel cell trucks to our customers on competitive terms,” Mr Brown said.

“Importantly for Pure, consistent with our strategy, the facility will enable us to service and supply hydrogen to the assets during the rental period and beyond.”

Mr Brown said the company attracted strong interest from financiers in its funding tender process.

He said potential funders were particularly interested in supporting companies providing alternative fuel trucks and devices.

“This $125 million agreement we believe will be the first of many, as hydrogen fuel cell technology is proven and the rapidly emerging hydrogen industry in Australia establishes itself.”

“The establishment of this financing facility supports our belief in both hydrogen fuel cell technology and the quality of assets we are procuring. We’re confident the assets will deliver great commercial outcomes for our customers in the years ahead and as the owners of the assets at the end of the rental term, strong returns on investment for our shareholders from both an extended useful life and the provision of service and supply of hydrogen during the asset’s life.”

Milestone vehicle supply agreement

Earlier this month Pure Hydrogen achieved a significant commercial milestone when it signed an agreement for the delivery of a HFC waste collection truck to the east coast of Australia waste management company Solo Resource Recovery.

Solo will use the clean energy vehicle on its municipal contracts including Tweed Shire Council in northern New South Wales.

Solo has the option to acquire additional HFC waste collection trucks after a successful six-month trial outcome.

Specially designed vehicles

Pure will be providing a specially designed side-loading, general household waste collection vehicle for the Solo trial.

The aim is to assess the feasibility of the hydrogen fuel cell electric vehicle under different operating conditions, providing an opportunity for participating councils to determine how they can transition to hydrogen fuelled electric waste collection vehicles, and the infrastructure to support the technology.

Solo services over 1.2 million bins per week and Pure’s specialist waste collection truck will be deployed for an initial period of six months to Solo’s municipal operations facilitating waste collections from households in 2024.

Upon expiry of the six-month trial commencing in 2024, Solo has the option to extend its lease on the trial vehicle and accept additional HFCEVs waste collection trucks.

Depending on the outcome of the trial, further waste collection vehicles may be progressively deployed across Solo’s extensive New South Wales, Victorian, South Australian and Western Australian operations.

The Solo agreement is one of many Pure Hydrogen has now signed with multiple parties where the total quantity of potential HFC trucks to be supplied is greater than 100, assuming successful trials.