Enviva confirms long-term Japanese off-take contract with Sumitomo Forestry
Global industrial wood pellet major Enviva Partners, LP has announced that its sponsor’s previously disclosed 18-year, take-or-pay off-take contract to supply a major Japanese trading house is now firm as all conditions precedent have been satisfied. Sales under the contract to Sumitomo Forestry Co., Ltd are expected to commence in 2023 with annual deliveries of 150 000 tonnes per annum.
According to a statement, the Partnership expects to have the opportunity to acquire this off-take contract, along with associated wood pellet production capacity, as part of a drop-down transaction from its sponsor.
Enviva and companies like Sumitomo Forestry are leading an energy transition away from fossil fuels in favor of renewable sources that can provide for dramatic reductions in lifecycle greenhouse gas emissions. Notably, our off-take contract with Sumitomo Forestry, which runs from 2023 to 2041, has become firm as our customer was able to complete its project financing and lift all conditions precedent to the effectiveness of the contract even amid current volatility and uncertainty in global markets. With a notional value of nearly US$600 million, we believe this contract is a vote of confidence in Enviva’s ability to deliver our product sustainably and reliably, even as many other industries and sectors experience significant instabilitysaid John Keppler, Chairman, and CEO of Enviva.