Export Finance Australia (EFA) has conditionally approved a €120m ($126.8m) commitment for Vulcan Energy's phase one Lionheart integrated lithium and renewable energy project.

This commitment is a part of Vulcan's debt financing process and follows a non-binding letter of support received in October 2023.

The approval is contingent on final due diligence and legal documentation including an Australian export contract.

Located in the Upper Rhine Valley, Germany, the integrated renewable energy and lithium project aims to decarbonise the lithium supply chain for EVs while providing renewable heat and power to local communities.

The first-phase Lionheart project targets annual production of 24,000 tonnes of lithium hydroxide monohydrate (LHM), sufficient for approximately 500,000 EVs.

Vulcan will supply key automotive and battery manufacturers in the European supply chain, including Stellantis, its fourth-largest shareholder.

Vulcan Energy chief financial officer Felicity Gooding said: “The commitment from Export Finance Australia is an important step towards the finalisation of our debt financing package and we are delighted with the support received to date.

“As an Australian and Frankfurt dual-listed company, the backing of Australia’s export credit agency further deepens the relationship between Australia and Germany, at a time when securing global supply chain security is paramount.

“The Lionheart Project will build Australia’s sovereign capability in Adsorption-type direct lithium extraction, the lowest-cost form of lithium production.”

Vulcan Energy is advancing its financing process with BNP Paribas as its financial advisor. The company has engaged with the European Investment Bank, Export Credit Agencies and commercial banks throughout 2024.

Vulcan anticipates receiving commitments from other funding parties in the coming weeks.