You drive along at 15 miles an hour and the machine recognizes a particular kind of weed and sprays the particular kind of herbicide on that weed at 15 miles an hour. So guess what? Huge amount of reduction in the amount of herbicides that’s applied to that field. That’s huge. And same thing you can do that with fertilizer and all the rest. So the techniques people have misunderstood or thought that agriculture is mature. It’s not mature. There’s a data revolution, equipment revolution occurring and we’re paying attention and that’s what our Verity is leveraging.
Operator: Okay. Thank you. One moment for the next question. And our next question will be coming from Abhishek Sinha of Northland Capital Markets. Your line is open.
Abhishek Sinha: Yeah, thanks for taking my question. If you could remind us how much capital do you need actually right now to build the project? And how much do you actually expect from DOE?
Patrick Gruber: Lynn, you want to take that one?
Lynn Smull: Sure, our hard costs for the project are tracking, as we do the detailed engineering and work through the remainder of the year and into Q1 to finalize the lump sum pricing, tracking at about $1.2 billion, $1.3 billion for the hard cost. As far as the DOE loan, that’s a function of the debt service coverage ratios and other terms, the maturity of the off-takes, and we’re modifying certain features of the project to allow for a higher debt capacity. We’ve applied for $950 million of debt, and we think we’ll succeed at that level. But there are other costs associated with a project financing, like you have to pay, you have to prepay or — sorry, provide for the interest during construction and other reserves associated with the debt. So that adds to the total finance and install cost.
Abhishek Sinha: Got it. And like how much have you really invested in the financing and securing the equipment and materials? And how much more you think is required and when do you expect that capital to be deployed?
Lynn Smull: Well, we’ve spent about a $100 million to date on the development of Net-Zero 1 out of that $100 million it’s comprised of site control permitting, a lot of engineering, which is not a hard asset, but it’s IP. And then a certain amount of that is equipment deposits. So by the time we get to financial close, we could be $150 million in, including more equipment deposits. And we would then choose, depending on the structure of the equity, whether — how much of that we leave in the project as equity in kind. But we don’t — I think the total finance install cost that I just mentioned will be substantially more than $100 million or $150 million. So we have to go and get third party capital for that. That’s why we’re in process with the DOE and third party equity investors at the project level.
Abhishek Sinha: Sure, I got it. And in terms of your project financing, you have to get the EPC wrapped up and then I’m trying to understand like, to get EPC wrapped up you have to get the lump sum turnkey pricing right and when does that — I mean, if I need to put my hat on like where exactly I need to put like in terms of where should we latch on, like where do we get lump sum turnkey pricing by when should we achieve that.
Lynn Smull: So now you’re asking questions that sort of is another track of what was asked earlier in terms of milestones and I don’t think we’re prepared to talk a lot about those in detail yet. We’ll assess a key milestone as it occurs and disclose that, but I don’t want to put dates on those activities.
Patrick Gruber: Yeah I’d say it’s one of these things we can’t win at this and from the standpoint of communicating those kind of milestones publicly because they’re going to change. Everything changes because we find something different, there’s a, I don’t know, like, it’s an inflationary environment, anyways we’re constantly updating the things. You’ve got the DOE over here with their questions and we have to adjust to them and we have equity people that we’re working with too. And so it’s coming together. [indiscernible] has been a very good partner, I can tell you that much. And we’ve already negotiated the contract. We got to finalize the numbers. Finalizing the numbers depends upon timing. And we’re working through it, keeping it updated.
They’re going through extra details. We’re looking at the scope of the project and stuff. But it’s all going along on a good schedule. And so we like what we see, we’re trying to bring it all together, but the rate limiting step is DOE right now.
Abhishek Sinha: Sure. Thanks. Got it. Last one, if I could please, have you heard anything or anything has changed in terms of your portfolio after agreement? Are you getting any questions from those guys? Has anything changed in terms of the agreements there?
Patrick Gruber: No, the airlines that we work with, they’re all cooperative partners for us. They recognize that timelines will have to change. Some of them had conditions precedence at the end of the year and stuff, but they’re all — everyone is cooperative and working on extending, modifying them and whatever. They recognize that ETJ is a very low-cost route to make jet fuel. That matters in this space. It also is the most scalable one, more so than any other technology that’s out there, we believe, and I think they will too. We’ll be out talking more about this with people more publicly. We just wrapped up a study that we did with McKinsey here for the last few months and they verify what we thought they did independently.
We like that. And so, we just got to — there’s so much noise in this space, there’s only a few things that can work. You think about it. You got to have something that’s cost-effective. Check. You got to have something scalable. Check. Something that’s leverages existing infrastructure, right, drop-in, FEED stock-wise and on the product side. Check and check. So getting everyone to understand this, that this is the game afoot, and [HEFA] (ph) is a — that’s the stuff that’s made from oilseeds or from waste fats and oils that’s made from renewable diesel. That has potential too, but it’s got its own issues because it takes away from renewable diesel or competes and it adds cost to renewable diesel in order to make SAF and it’s limited on feedstock supply.
So it’s a — ATJ is a really, really good product and we’re more confident about it every single day about that.
Abhishek Sinha: Sure, [indiscernible].
Operator: Thank you. At this time, there are no more questions in the queue. I would like to turn the call back over to Pat Gruber for closing remarks. Please go ahead.
