Sheffield-based energy storage and clean fuel company ITM Power — a producer of electrolyser machines that make hydrogen from water — said on Friday it raised £250 million by selling shares in a placing to new and existing investors.

The proceeds will be used to help finance the construction of a second factory in the UK and to expand overseas.

The new shares being issued represent 11.4% of the existing issued ordinary share capital of the company prior to the capital raise.

ITM Power said it intends to use the proceeds “to significantly scale up and expand its operations and for continued technological and corporate development to take advantage of the forecast exponential demand growth in the global green hydrogen electrolyser market.”

£170 million of capital expenditure and £40 million of working capital will be used to support the semi-automation of the firm’s Bessemer Park plant near Sheffield and also the development of a second manufacturing facility in the UK as well as a new international factory.

These facilities are expected to give the company 5GW of annual manufacturing capacity by 2024.

ITM Power plc CEO Graham Cooley said: “ITM Power intends to maintain its market leading position in the global electrolysis equipment market.

“The money raised will fund a second UK factory with even more automation and our first international manufacturing facility, as well as providing the capital necessary to continue to make our products even better. 

“In the face of the rapidly accelerating worldwide demand for electrolysis, the time to invest is now.

“Our strategy will create jobs for the UK and a national champion in the vital green hydrogen sector.”