The Energy Technologies (ASX:EGY) share price has charged 9% higher. Here's why.

The Energy Technologies (ASX: EGY) share price soared today on the back of winning a government grant. We take a closer look.

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The Energy Technologies Limited (ASX: EGY) share price charged higher today on news the company has won a sovereign grant.

Shares in the cable manufacturer were up 9.2% at 8.3 cents in closing trade, after hitting a 20.83% high of 14.5 cents this morning.

What Energy Technologies does

Based in New South Wales, Energy Technologies manufactures and sells specialist industrial cables. The company focuses on the Australian market through its 100% ownership in Bambach Wires and Cables Pty Limited and Cogenic.

In addition, Energy Technologies is also actively seeking potential acquisitions for the group through other products, businesses and opportunities. The $25 million market cap company was founded in 1983 and listed 10 years later on the ASX.

What happened today?

The company advised that Bambach has won a $1.34 million government grant.

The sovereign industrial capability priority grant aims to improve Australia's manufacturing capability. It specifically supports the Continuous Shipbuilding Program, which includes submarine acquisitions, land combat, protecting vehicles and technology upgrades.

The grant will enable the company to boost its existing capability in manufacturing small, medium, and large diameter, low-voltage silicone copper cables. These are essential for use in submarines and shipbuilding. Total cost for the project is estimated $1.74 million, of which the government is contributing $1.34 million.

Furthermore, Energy Technologies will not have to spend on additional infrastructure as the current Bambach facility in Rosedale is large enough to house the new equipment. As such, construction will start immediately.

Management comments

Energy Technologies CEO Alf Chown welcomed the news, stating:

It is an exciting time for Bambach, with a great deal of the commissioning of Rosedale now complete and the move into larger Government contract work through the timely installation of the Silicon manufacturing equipment, the company is looking at a bright future.

We would also like to thank the Federal Government for the professional manner in which they have worked with us and the support they have shown to Australian manufacturing.

Motley Fool contributor Daniel Ewing has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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