Reaction Engines Ltd., today announces the signing of a 10m euro European Space Agency (ESA) contract which will enable the development of a ground based demonstrator of SABRE, a new class of aerospace engine which is highly scalable with multiple potential applications in hypersonic travel and space access.

Today's signing represents the final piece of the British Government's 60 million pound commitment of grant funding towards the SABRE programme. Within this commitment, 10m euro is being administered by ESA's Technology Centre (ESTEC), alongside 50 million pound directly through the UK Space Agency. The terms of the UK Space Agency grant funding were agreed in late December 2015.

In November 2015, BAE Systems invested 20.6 million pound in Reaction Engines to acquire 20 per cent of its share capital and agreed to provide industrial, technology development and project management expertise to support Reaction Engines during its development phase.

The agreements now in place between Reaction Engines, ESA and the UK Space Agency, together with the working partnership with BAE Systems, set the framework for Reaction Engines to deliver the world's first SABRE ground demonstrator engine by the end of the decade.

Mark Thomas, Chief Executive Officer of Reaction Engines Ltd., commented:

"We've had valuable support from ESA and UKSA to date, and today's agreement is a further vote of confidence not only in the revolutionary potential of this technology, but our ability to deliver on it. We are now entering an exciting phase where we can accelerate the pace of development to get SABRE up and running."

Franco Ongaro, Director of Technical and Quality Management, ESA said:

"Reaction Engines and ESA have been working together since 2008 to make the SABRE concept a reality. This new contract marks an important milestone in our continued collaboration to mature the SABRE engine design. It should take us to a point where we can expect to be testing a demonstrator engine in 2020."

Katherine Courtney, acting Chief Executive Officer, UK Space Agency, commented:

"We want the UK to be the best place in Europe to innovate and the SABRE engine programme has the potential to change air and space travel forever. When the UK Space Agency made its 60m pound commitment in 2013, we demonstrated our courage and belief in the development of this ground-breaking technology. Drawing on the expertise of the European Space Agency, our funding will help ensure that Reaction Engines and industry can collaborate to make this revolutionary engine a reality."