Translation: Original published in Finnish on 06/18/2026 at 08:08 am EEST

Solar Foods announced on Wednesday that Business Finland has granted the company a total of 77.8 MEUR in funding for the construction and commissioning of its Factory 02 production facility. In our estimates, we have assumed the company will raise the maximum amount of the 110 MEUR IPCEI grant, so the grant decision of just under 40 MEUR was in line with our expectations. However, what was new compared to our expectations was the 38.1 MEUR R&D loan granted to the company under attractive terms. The secured financing is positive for Solar Foods and another key step towards the industrial-scale Factory 02. At this stage, the announcement does not necessitate any revisions to our estimates. However, it demonstrates Solar Foods' ability to raise funding on terms more favorable than the market price. In addition, affordable debt financing reduces the equity dilution risk associated with the Factory 02 investment.

Financing reduces the risks of industrial scaling

The financing decisions consist of a 39.6 MEUR grant and a 38.1 MEUR product development loan. The granted funding is allocated to the implementation phase of the Factory 02 project planned for Lappeenranta, and it is conditional on the final investment decision for the factory and the securing of overall financing. Solar Foods aims to make an investment decision this year. The industrial-scale Factory 02 is a crucial step for Solar Foods' commercialization, as it would elevate the company's production capacity from the current demonstration phase to an industrial scale. After Business Finland's decisions to date, approximately 21 MEUR of the company's IPCEI notification remains, for which the company aims to secure funding later. In our view, instruments such as the funding granted by Business Finland, together with strategic partnerships, are key to scaling capital-intensive production in new food categories such as hydrogen fermentation.

The terms of the R&D loan are exceptionally attractive

While the grant share was largely in line with our expectations, we consider the 38.1 MEUR R&D loan granted to the company excellent news. The loan period is 10 years, of which the first 5 are a period of grace. The interest rate of only 1% and the unsecured nature of the loan make the terms very favorable, given the company's current risk profile and early development stage. The estimated 6 MEUR government grant related to the loan reflects the financial value of the loan terms compared to market-based financing (i.e., the transaction does not involve a separate 6 MEUR grant). In our view, this whole demonstrates Solar Foods' ability to raise significant amounts of funding on terms clearly more favorable than the market price. Affordable debt capital is critical due to the company's early development stage and the significant size of the upcoming factory investment.