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DBC Invest makes first investment with majority stake in Grauballegaard Biogas

In Denmark, the newly formed investment company DBC Invest has announced that it is making its first investment in domestic biogas plants by taking a majority stake majority in Grauballegaard Biogas ApS, a farm-based biogas plant currently under construction in Lemming on Jutland. The facility is expected to be commissioned in mid-2021.

In Denmark, DBC Invest is making its first investment in domestic biogas plants by taking a majority stake majority in Grauballegaard Biogas ApS, a biogas plant currently under construction in Lemming on Jutland. The plant is expected to be commissioned in mid-2021 (photo courtesy Vestjyllands Andel).

Danish Bio Commodities (DBC), is a recently formed company jointly set-up in Jutland by Vestjyllands Andel, Jysk Energi, and Langfristet Erhvervsfinansiering, to provide advice to Danish farm-based biogas plants and assist in the certification of the plants and trade of green gas certificates.

The Danish biogas industry has developed a lot in recent years, and with the government energy agreement from June 2018, long-term framework conditions have been ensured, which supports that this development continues. Thus, we also expect an increase in the number of farm biogas plants, which is particularly relevant for our members. In addition, the climate has become high on the agenda of both private individuals and companies, at the same time as legislation in the area now imposes and encourages European companies to have a green profile, said Steen Bitsch, CEO of Vestjyllands Andel commenting on the formation of DBC.

According to DBC, there are currently 55 farm-based biogas plants in Denmark, which are typically owned by one or more farmers in cooperation – in some cases also with external investors. It is these who in the future will benefit from the service and know-how that DBC can provide.

Leverage synergies

DBC has also entered into a collaboration with the agricultural knowledge and innovation house, SEGES, which has the experience and solid competencies in the biogas area. SEGES will be responsible for helping the biogas plants to prepare the documentation needed to obtain the certification of the biogas plant.

Our goal with DBC is to optimize the value contained in the biomethane certificates. Green energy is attractive and in demand by many companies that use energy in their production. This is because many companies have a green profile and want to go all the way by also buying sustainable energy. There is an increasing value in the market, and we want to help get it back to the producers. Among other things, we can do this by matching the biogas producer with the buyer who will pay the most for the certificates. At the same time, we are working together with suppliers to deliver a biomass composition that matches the energy buyer’s specific wishes, said Rune Ledgaard Sørensen, CEO of DBC and DBC Invest.

In the spring of 2020, Danish Bio Commodities established the investment company DBC Invest with a total investment pool of DKK 215 million (≈ EUR 28.87 million) earmarked for Danish biogas plants.

Danish Bio Commodities has been positively received in the biogas community. We have already entered into the first certificate trade agreements and are in close dialogue with several plants. In connection with this dialogue, a number of facilities have requested a closer partnership with DBC and its owners, which has led to the establishment of DBC Invest. The synergies that are created in the form of Vestjyllands Andels’ insight into the agricultural sector and access to biomass, Jysk Energi’s insight into the energy sector, and Langfristet Erhvervsfinansiering knowledge of financing and solid investment capital, we consider DBC Invest to be a very attractive future partner in the Danish biogas industry, said Rune Ledgaard Sørensen.

Grauballegaard Biogas first on the map

DBC Invest is making its first investment by taking a majority stake in Grauballegaard Biogas, a farm-based biogas plant currently under construction in Lemming.

We welcome the agreement and the upcoming collaboration with Grauballegaard Biogas. The investment is spot on in relation to DBC Invest’s ambitions to be an attractive partner in the Danish biogas industry. In addition to capital, we will contribute with a solid insight into the agricultural and energy sector, which we will be able to utilize to the maximum in collaboration with Grauballegaard’s preliminary experience from the biomass and biogas area. That is why we see good prospects for the plant, said Rune Ledgaard Sørensen.

Mads Niær Kristensen, who is the owner of Grauballe farm and co-owner of Grauballegaard Biogas, will be a major supplier of biomass for the upcoming plant. At the same time, he will continue as director of Grauballegaard Biogas and play a central role in the establishment and development of the plant.

I believe in a good and fruitful collaboration. DBC consists of some professionals who have a great interest in and knowledge of biogas, so there is fertile ground for bringing a lot of synergies forward. In addition, they are involved in other biogas plants and are involved in the development of grass protein, which helps to bring further knowledge to the table. We do not all need to reinvent the wheel, remarked Mads Niær Kristensen.

The plant is being built in Lemming, in the municipality of Silkeborg in central Jutland, where there are no other biogas plants in the immediate vicinity. Thus, there is a good catchment area for the delivery of biomass from the area’s agricultural holdings.

Agriculture, for example, plays a large and significant role in, for example, biogas production in connection with the realization of the green transition. Vestjyllands Andel considers biogas production as important value creation in Danish agriculture. Therefore, we are pleased that we have put the first flag on the map, and hopefully, more will come. It is important for us that agriculture is credited for the green transition both financially and environmentally, said Steen Bitsch.

DBC Invest has ambitions to invest in several biogas plants in the coming years aiming for an ownership share of 30-49 percent in each individual biogas plant

The first investment is always special. Therefore, it is with great joy and pride that we can now announce DBC Invest’s collaboration with Grauballegaard Biogas and Mads Niær Kristensen. We meet great interest in the biogas industry for our business model in DBC Invest, based on active ownership. We therefore also have expectations that in the coming months we will be able to publish more collaborations, ended Niels Brøndsted, CFO of Jysk Energi,

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