Zenith Energy Ltd has entered into a binding letter of intent and exclusivity for the acquisition of 100% of the issued share capital of an Italian biogas development company (the target), which owns the rights to develop a fully permitted and engineered biogas production facility in Italy, subject to completion of the proposed acquisition.
The project is fully permitted, fully engineered, and construction-ready, with all material permits, lisences, and engineering approvals already obtained. Once operational, the project will produce approximately 3 million m3/y of methane gas, for injection into the Italian gas network, sold at Italian gas prices and benefiting from 15-year government incentives.
A long-term feedstock supply contract with a major Italian regional authority, comprising approximately 50% municipal waste and 50% agro-industrial waste, significantly mitigates what is widely regarded as the principal operational risk associated with biogas projects. This provides the project with a stable and secure long-term feedstock supply, supporting predictable operations, and facilitating access to project financing.
The project's projected annual revenues at full operational capacity are estimated at approximately €5 million. The projected annual EBITDA is estimated at approximately €2.5 million; a 50% EBITDA margin that reflects the project's strong underlying economics and the benefit of long-term, government-backed revenue incentives.
Zenith is providing the operational expertise required to produce and sell gas into the Italian network, together with the project finance expertise and financing relationships necessary to unlock its full potential. As with the company's previously announced acquisition and development of its solar portfolio, both the acquisition of the target and the development of the project are expected to be funded through non-dilutive green project financing.
Andrea Cattaneo, CEO, commented: “The proposed acquisition marks the be-ginning of Zenith's second Italian renewable energy division and establishes a strong platform from which to build a diversified biogas and biomethane business in Italy.
“The project is fully permitted, fully engineered, and supported by long-term waste supply agreements with a group of municipal authorities and leading food and agro-industrial companies. Having already achieved the key permitting, engineering and commercial milestones, the project is well positioned to advance into construction. Zenith believes it is uniquely positioned to provide the operational expertise, sector experience, and project financing capabilities required to unlock the project's full potential.
“The proposed acquisition reflects our Italian renewable energy strategy in action: acquiring high-quality development assets at attractive valuations and creating value by financing, constructing, and operating them. We have successfully applied this approach in our solar development business and are now extending it into the rapidly growing Italian biogas sector.
“Biogas is a natural extension of our Italian platform. We have operated as a natural gas and electricity producer in Italy since 2013, giving us extensive experience of the Italian energy market, its regulatory framework and the commercialisation of gas production. Combined with a highly supportive policy environment, including government grants covering up to 40% of eligible CAPEX and 15-year biomethane incentives, we believe the sector offers a highly attractive long-term investment opportunity.
“We intend for this proposed acquisition to serve as the foundation for the development of a significant Italian biogas and biomethane portfolio in Italy, and we look forward to completing the transaction during 4Q26.”
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