Minesto proposes SEK130m tidal energy fundraising

Minesto intends to raise approximately SEK130 million through a rights issue to advance its first commercial tidal energy arrays, with projects in the Faroe Islands and Ireland identified as the principal investment candidates.

The Swedish marine energy developer announced the proposed fundraising on 21 October 2026, setting out plans to use the proceeds for project development, technology improvements, distributed energy applications and general working capital.

The transaction remains conditional. Minesto’s board has announced its intention to undertake the share issue, but shareholders must first approve the necessary authorisation at an extraordinary general meeting on 23 November.

Subject to that approval, the board intends to make its formal decision on 25 November, when the final issue terms, including the subscription price, would be announced.

Minesto has secured subscription undertakings worth approximately SEK10.5 million and a guarantee commitment of SEK67.5 million. Together, these arrangements cover around SEK78 million, equivalent to approximately 60% of the proposed issue.

The largest shareholder, Corespring New Technology, has committed SEK10 million, while shareholding members of Minesto’s management have undertaken to subscribe for approximately SEK0.5 million.

Vator Securities has provided the remaining SEK67.5 million as a bottom guarantee. The agreement provides support for subscriptions up to the specified level, subject to its terms, rather than establishing that the full SEK130 million has already been invested.

A guarantee commitment also differs from a completed share subscription. The amount eventually subscribed by the guarantor will depend on investor participation and the issue’s allocation arrangements.

If the transaction is approved and proceeds as planned, the record date will be 3 December and the subscription period will run from 7 to 21 December. The company expects to publish the final result later that month.

Minesto has acknowledged that its existing working capital is insufficient to cover the full capital requirements of its commercial and technology development programme. The proposed fundraising is intended to support a transition towards larger commercial installations.

The first priority is advancing Hestfjord in the Faroe Islands and Euro Dragon Farm in Ireland towards investment decisions. Expenditure would cover permitting, detailed engineering and the formation of investment arrangements needed before construction commitments can be made.

Hestfjord is planned as a phased tidal array, beginning with 10MW of generating capacity and potentially expanding to 200MW. The larger figure is an intended development scale rather than capacity already installed or authorised for construction.

Euro Dragon Farm is a proposed array of up to 10MW in Irish waters. Earlier in October, Minesto was selected for €20.2 million of support through the European Union’s Innovation Fund.

The potential grant represents approximately 60% of the project’s investment requirement. Grant agreement preparation is underway, with completion expected during the first quarter of 2027.

That selection is a significant financing development, but it does not mean the grant agreement has been executed or that all remaining project funding is secured.

The Innovation Fund support is associated with the Irish project, while the proposed rights issue would provide broader corporate capital for development activities across Minesto’s portfolio.

Both planned arrays are based on the company’s Dragon tidal power technology, which uses a submerged wing carrying a turbine and generator.

The wing is attached to the seabed through a tether and moves across the tidal flow along a controlled figure-of-eight trajectory. Hydrodynamic lift drives the movement, allowing the device to travel through the water faster than the surrounding current.

This increases the relative flow through the turbine compared with a stationary device placed in the same current. The turbine converts that movement into mechanical power, which drives a generator.

Electrical output is transferred through a cable arrangement associated with the tether and onward through the installation’s subsea electrical infrastructure.

The system relies on active control of the wing’s movement to maintain a suitable trajectory and respond to changing flow conditions. Its performance depends on local current speeds, hydrodynamic characteristics, turbine efficiency and the availability of the equipment.

Minesto has developed the technology for tidal environments where current speeds may be insufficient for some conventional stationary turbine designs to operate economically.

The predictability of tidal cycles offers a different generation profile from wind and solar, whose output is influenced by weather conditions. Tidal generation nevertheless changes throughout the cycle and cannot be regarded as continuous full-rated output.

Commercial array development therefore requires consideration of the expected current profile, the number and arrangement of devices, their electrical connections and how maintenance will be undertaken.

Underwater equipment must remain accessible for inspection, repair and replacement. Vessel availability, weather, tidal conditions and the equipment used to recover and redeploy devices can influence the duration and cost of interventions.

Minesto reported that it recently completed a full service intervention on a Dragon 4 installation within 48 hours. The company regards the result as validation of its modular servicing approach.

One completed intervention provides useful operational evidence, but does not establish a long-term availability rate or lifetime maintenance cost for a commercial array.

The proposed fundraising would also support continued Dragon technology improvements intended to prepare the system for larger commercial deployments.

Scaling the technology involves more than increasing individual turbine ratings. Production, installation, electrical integration, control systems and maintenance methods must be suitable for repeated deployment across multiple devices.

Minesto is also constructing a tidal energy microgrid project in the Faroe Islands with integrated battery storage. The development is intended to support future applications for isolated electricity systems and island communities.

Battery storage can absorb electricity during periods of generation and return it when demand exceeds immediate supply. However, its effectiveness depends on the relationship between generation patterns, demand, storage duration and available power conversion capacity.

The company hopes to use experience from the Faroese project to develop further distributed energy applications with local partners. The proposed rights issue would support those activities alongside the two principal commercial arrays.

Minesto is pursuing additional project development in Wales and other markets through partnerships with local developers and utilities. These opportunities remain at different stages and should not be treated as firm construction orders.

The company’s near-term financing timetable begins with the shareholder meeting on 23 November, followed by the planned board decision on 25 November. Completion of the proposed fundraising would provide development capital, while separate permitting, grant agreements and investment decisions remain necessary before Hestfjord and Euro Dragon Farm can proceed to commercial construction.