EverGen begins acquisition of RNG facility
Published by Abi Larkin,
Editorial Assistant
Energy Global,
EverGen Infrastructure Corp., a renewable natural gas (RNG) infrastructure platform for Canada, has annouced that it has entered into a letter of intent (LOI), with Grow the Energy Circle Ltd. (GrowTEC), in its capacity as general partner of CKPPQ Farms LP, to acquire a 67% interest (the proposed transaction) in a biogas facility in Alberta, Canada and to work with GrowTEC on developing and expanding the renewable gas output at such facility. This asset is a cornerstone project in a strategic jurisdiction on which EverGen can continue to participate in the consolidation and growth of the RNG industry.
GrowTEC, located on the Perry Family Farm near Lethbridge, Alberta, is a multi-faceted bioenergy venture of sustainable agriculture, integrating responsible best practices and renewable energy. At the core of GrowTEC is an operating farm scale anaerobic digester which converts biodegradable waste into biogas which is then upgraded to RNG for use in the gas grid. The project has an offtake agreement with FortisBC and will contribute to FortisBC’s target to have at least 15% of its gas supply carbon neutral by 2030.
Under the terms of the LOI, EverGen will acquire a 67% interest in the project, either directly or through ownership in a newly formed special purpose vehicle corporation that will hold the assets of the project for CAN$6.6 million consisting of an initial cash consideration of CAN$3.3 million and the issuance of 600 000 common shares of EverGen with a deemed value of CAN$5.50 per share. In addition, GrowTEC will have the right to nominate a director to the EverGen board at closing of the proposed transaction. Closing of the proposed transaction is expected to be completed in Spring of 2022.
The project is currently in phase one of development, which is expected to produce 80 000 GJ of RNG annually and will be completed by 3Q22. Upon closing of the proposed transaction, EverGen will work within the GrowTEC team to commence phase two expansion, which is expected to add an additional 60 000 GJ of RNG annually for a total of 140 000 GJ/y of RNG production from the project. This increases RNG production capabilities by over 40% across EverGen’s core operated projects. Additional cash consideration of up to CAN$4 million will be made upon achievement of certain milestones. Consideration for EverGen’s interest in the project will be funded from existing working capital and cash flow.
“We are thrilled to be partnering with GrowTEC and working with the Perry Family Farm on EverGen’s first project in the Alberta market. Alberta is a region with high quality organic feedstock and represents a strategic market for EverGen as it plans to become a dominant RNG producer in the province,” said Chase Edgelow, CEO of EverGen. “As we expand our RNG infrastructure platform, we are focused on investing in truly sustainable operations that contribute to carbon-negative energy production and positively impact climate change initiatives. GrowTEC is a true green leader, and we are looking forward to building a strong relationship in this agricultural community and having GrowTEC as a long-term equity holder in EverGen. This is another great example of the win-win strategic partnerships that EverGen has been able to strike with existing project owners and developers alike.”
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Read the article online at: https://www.energyglobal.com/bioenergy/18032022/evergen-begins-acquisition-of-rng-facility/
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