Canada-headed biogas upgrading technology supplier Greenlane Renewables Inc, has announced that it has signed an "agreement in principle" with France-headed SWEN Capital Partners SA (SWEN) based in Paris, France to create a joint venture company (JV Co.) to accelerate deployment of Greenlane’s biogas upgrading systems by providing an innovative finance solution for customers in Europe using a build, own, operate model.
SWEN Capital Partners is an AMF-approved management company, held mainly by the OFI group and Arkea. With nearly EUR 5 billion under management, SWEN Capital Partners is a long-standing player in Responsible Investment and now a diversified investment platform that includes both primary, secondary and direct fund investments. The JV Co. will combine Greenlane’s market presence, technical expertise, customer contacts and industry experience with SWEN’s financial backing.
We believe the joint venture will unlock new opportunities by creating a unique value proposition that attracts those customers requiring not only financing to deploy biogas upgrading systems but also long term guarantees. This innovative solution allows our systems to be owned and financed by the joint venture in which we will participate as a minority equity partner. Greenlane will be responsible for the construction, operation, and maintenance of the biogas upgrading units and our equity partner, SWEN, will be responsible for the financing. Customers benefit from reduced capital expenditures in projects, built-in operation, and maintenance while retaining their autonomy to sell the resulting renewable natural gas back to the natural gas grid, explained Brad Douville, President and CEO of Greenlane.
Reduce capital outlay
The intent of the parties is for JV Co. to assist in removing the burden of ownership on Greenlane’s clients by allowing them to replace initial capital outlays with a monthly fee.
SWEN brings extensive experience and knowledge in sustainable investing. The combination of Greenlane’s expertise and SWEN’s financial resources provides for credibility to the biomethane or RNG sector while enabling Greenlane to position itself as a leading integrated player in the market, said Olivier Aubert, Managing Director of the SWEN Impact Fund for Transition.
The joint venture represents a step-change evolution of Greenlane from the design and sale of biogas upgrading equipment, to offering customers a complete turnkey solution through a joint venture in which Greenlane retains an interest.
Potential customers include greenfield project developers and existing anaerobic digestion plant owners operating cogeneration units and having the interest to switch to injection of biomethane while keeping initial costs down.
We have the right products in the right market at the right time. For example with the recent announcement by the German Government to phase out coal, the Green Party in Germany is calling for a “gas turnaround” where fossil natural gas must be replaced by “green gases” – or RNG – as quickly as possible. Changing the global natural gas infrastructure from fossil-based sources to a renewable form makes both economic and environmental sense. Greenlane Renewables is set to benefit from this push to RNG with its strong presence in Germany and its showcase installation in Gustrow, said Brad Douville.
The creation of JV Co. is subject to the settling of a final agreement between the parties, a process that is expected to be concluded by the end of the second quarter. The current agreement in principle is non-binding except in respect of non-material terms and there can be no guarantees that a final definitive agreement will be reached.