Kistos (LSE: KIST) has picked up an equity interest of up to 20% in tidal energy firm Spiralis Energy after investing £800,000 into the London-based business.
The 20% is made up of 10% equity and 10% warrants following the financial backing and Kistos will be able to be represented on the company’s board.
Kistos claims that while looking to support green technologies and the energy transition it invested in the firm “which is at an advanced stage of testing and has the potential to revolutionise the tidal energy industry.”
Kistos executive chairman Andrew Austin said: “Kistos is committed to supporting the energy transition and believes this can be done whilst exposing shareholders to asymmetric value accretive opportunities.
“Our investment in Spiralis follows extensive due diligence on the business, its technology and commercial strategy and the tidal power sector and current market participants.
“Providing financial backing at this stage, with imminent final testing and the potential for commercial deployment shortly thereafter, meets our risk profile for this investment.”
Spiralis is developing the ‘Axial Skelter’ solution which is made from made from fully recyclable, 3D-printed segments.
It says that its entire tidal energy generator can be produced in less than a week.
The firm claims that its solution is “much more modular than other tidal generation systems” as the unit “snaps together” from individual components that can be “3D printed anywhere in the world.
Kistos says that with its investment Spiralis will kick off long term survivability testing of its system.
If testing is successful it “could lead to widescale deployment to provide a sustainable energy generation capability,” Kistos claimed.
Austin added: “Whilst as a management team our priority remains to seek value accretive opportunities in hydrocarbons, this investment offers a path to meet our stated sustainability commitments in conjunction with providing direct upside exposure and influence not available with traditional offsetting initiatives.”
Panmure Liberum director and oil and gas research analyst Ashley Kelty argued that this is a good move for the oil and gas firm as lit looks to diversify its portfolio.
Kelty wrote: “This is a low cost means for Kistos to diversify its portfolio and mitigate the carbon impact of its conventional hydrocarbon business.
“We see this as offering substantial future upside, although testing is required before we could assess the prospective upside in monetary terms.”
