Delorean Faces Funding Challenge After NSW1 Bioenergy Facility Approval

• Final Investment Decision reached for $62.1 million NSW1 Horsley Park Bioenergy Facility
• $30.5 million in grants secured from NSW Government and ARENA
• Facility to produce renewable biomethane reducing Brickworks’ Scope 1 emissions by 38%
• Construction expected to begin in Q3 2026, subject to financial close within six months
• Delorean to fund remaining $31.6 million through debt and equity issuance

Delorean Greenlights NSW1 Bioenergy Project

Delorean Corporation Ltd (ASX:DEL) has announced a positive Final Investment Decision (FID) to fully own and operate the NSW1 Horsley Park Bioenergy Facility in New South Wales. The $62.1 million project, co-located on Brickworks’ land under a 25-year lease, aims to process organic waste into renewable biomethane for onsite use by Brickworks Building Products Pty Ltd, a subsidiary of Washington H. Soul Pattinson and Company Limited (ASX:SOL).

This milestone follows the securing of $30.5 million in government grants, including $20 million from the NSW Government’s Net Zero Manufacturing Initiative and $10.5 million from the Australian Renewable Energy Agency (ARENA) under the National Industrial Transformation Program. These grants contribute directly to the project’s construction costs, with Delorean responsible for sourcing the remaining $31.6 million through a combination of debt and equity within six months to achieve financial close.

Project Scope and Environmental Impact

The NSW1 facility is designed to process up to 150,000 tonnes per annum of source-separated organic waste, with an expected production of approximately 253,000 gigajoules of renewable biomethane annually. This renewable gas will replace around 50% of the natural gas currently used by Brickworks’ brick manufacturing operations at Horsley Park, resulting in an estimated 38% reduction in the site’s Scope 1 emissions.

Construction is slated to commence in the third quarter of calendar year 2026, subject to securing the necessary funding, with commissioning expected by mid-2028. Initial revenues are anticipated within approximately 18 months from organic waste acceptance and first gas production. The project is forecast to generate over $13 million in annual revenue for Delorean over a minimum 25-year lifespan, derived from multiple streams including gate fees, renewable natural gas sales, carbon credits, and potentially renewable fuel certificates and liquid fertiliser.

Binding Agreements and Funding Strategy

Delorean and Brickworks have formalised their partnership through binding lease and gas supply agreements, both conditional on Delorean achieving financial close within six months. The lease grants Delorean rent-free access to the project site during construction, while the gas supply agreement secures Brickworks’ offtake of all renewable gas produced, alongside rights to purchase associated carbon credits.

To fund the remaining $31.6 million, Delorean has engaged Coltbridge Capital to source debt financing and Canaccord Genuity alongside Curran and Co to explore equity raising options. Details on these capital raising efforts will be disclosed once finalised.

Industry and Market Context

Delorean’s Managing Director Joe Oliver described the NSW1 facility as a "transformational milestone" for the company and a significant development for Australia’s renewable energy sector. The project supports Brickworks’ sustainability goals by reducing emissions and diverting organic waste from landfill, aligning with broader industry trends towards decarbonisation and circular economy principles.

Brickworks’ CEO Mark Ellenor emphasised the importance of reliable and affordable gas for manufacturing and welcomed the project’s contribution to diversifying energy supply and reducing carbon emissions. This initiative also introduces low carbon bricks to the New South Wales housing market.

This announcement builds on Delorean’s recent progress in bioenergy infrastructure, including the SA1 Salisbury project, where the company secured a $1.1 million milestone payment from ARENA and advanced construction and offtake agreements, highlighting its ongoing commitment to expanding renewable gas production in Australia.

Bottom Line?

Delorean’s NSW1 project marks a significant step in bioenergy infrastructure, but its progress hinges on securing $31.6 million in funding within six months to commence construction as planned.

Questions in the middle?

• Will Delorean successfully secure the $31.6 million in debt and equity funding within the six-month timeframe?
• How will the NSW1 facility’s operational performance and revenue streams develop once commissioned?
• What impact will this project have on Delorean’s broader strategy and financial position amid its transition to bioenergy infrastructure ownership?