£20m Scottish public funding injection for firm behind 'world first' plan to revolutionise green air travel

A company developing zero-emission aircraft engines has secured £20 million of backing from the publicly-owned Scottish National Investment Bank amid the journey to net zero.

ZeroAvia is behind what is being billed as the world’s first zero-emission, hydrogen-electric engines for commercial aircraft. Highlands and Islands routes could be among the earliest flights to utilise zero-emission flight technology. The firm has already submitted its initial hydrogen-electric engine - the ZA600 - for certification with regulators and is “working actively” towards testing the final design.

ZeroAvia was founded in California before developing a substantial presence in the UK. It has a longstanding partnership with Glasgow and Aberdeen airports - via parent AGS Airports - and signed an agreement earlier this year with ScottishPower to develop low-carbon hydrogen supply for key airport locations. The company is said to be “actively exploring” potential sites in Scotland.

Viplove Bhargava (former senior associate, Scottish National Investment Bank), Dominic Weeks (head of external affairs and marketing, ZeroAvia), Gabriele Teofili (managing director UK, ZeroAvia), Mark Munro (chief investment officer, Scottish National Investment Bank), Robin Tayal (director of net zero, Scottish National Investment Bank). Picture: Simon Pizzey

The Scottish National Investment Bank (SNIB) will join investors including American Airlines, BA owner International Airlines Group (IAG) and Itochu Corporation. The firm’s series C funding round was co-led by Airbus, Barclays Sustainable Impact Capital and NEOM Investment Fund, with UK Infrastructure Bank joining as a cornerstone-level investor.

Robin Tayal, investment director at SNIB, said: “Decarbonising aviation is one of the key environmental challenges we face and it is fundamental to the net zero transition. We are pleased to address it by investing in ZeroAvia, enabling critical research and manufacturing. ZeroAvia has a robust long-term plan for the growth of its technology, which will bring tremendous benefits to the wider supply chain and manufacturing sector.”

The deal marks the bank’s first investment in hydrogen-based technology and the sustainable aviation sector. Bosses said the investor provided patient capital to projects that support the “development of a fairer and more sustainable economy”.

Val Miftakhov, founder and chief executive of ZeroAvia, said: “We have closed an exceptionally strong financing round to help us deliver the clean future of flight for the entirety of aviation. As a purpose-driven impact investor, the bank is an ideal partner for ZeroAvia.

“Scotland’s ambitious net zero targets, its strategic focus on hydrogen and its strong existing aerospace skills base make it an attractive place for ZeroAvia’s UK production operations as we scale into a major aerospace manufacturer.”

The company is developing the building block technologies to support its second engine class - ZA2000 – designed for 40-80 seat regional aircraft. It is also selling its component technology, including electric motors and fuel cell power generation systems, to other electric aviation innovators.

Last week, Scottish airline Loganair said it expected a “game changing” new hybrid electric aircraft to be flying passengers in Orkney and Shetland within four years. It announced a deal with Swedish manufacturer Heart Aerospace to be the first UK carrier to fly its ES-30 aircraft, which will be powered by batteries and traditional aviation fuel. The aircraft will be able to carry 30 passengers up to 124 miles using its batteries and 248 miles in hybrid mode.

The move is aimed at accelerating Glasgow-based Loganair towards its 2040 net zero target.

The cutting-edge aircraft in which Loganair hopes to fly Orkney and Shetland passengers by 2028