Norway-headed developer of production facilities for biocarbon and other carbon-neutral products Vow Green Metals AS has announced that it has signed agreements with compatriot regional renewable energy producer Vardar AS to invest up to NOK 100 million in Vow Green Metals and its large-scale biocarbon production facility in Hønefoss, Norway.
Vardar is a regional renewable energy producer with operations and ownership within bioenergy, carbon capture and utilization (CCU), wind, solar, and hydropower.
Via its subsidiary Vardar Varme AS, the company also operates the district heating network in the Hønefoss region and distributes thermal energy at Treklyngen Industrial Park where Vow Green Metals’ large-scale biocarbon production facility is under development.
With its 20,000 tonnes per annum production capacity and abatement potential of 100,000 tonnes of fossil carbon dioxide (CO2), Vow Green Metals’ large-scale biocarbon production facility is set to become one of Europe’s larger facilities.
Split investment
The NOK 100 million investment from Vardar will be split equally between Vow Green Metals AS and VGM Operatør AS, a wholly owned subsidiary of Vow Green Metals, holding all assets, rights, and obligations related to the large-scale biocarbon production facility at Hønefoss.
Under the terms of the investment agreement, Vardar will provide a loan of NOK 50 million to Vow Green Metals. Vardar has then the option to subscribe for shares in Vow Green Metals for six months and use the Loan as a contribution in kind to settle the subscription consideration.
The subscription price in the option agreement will be the lowest of (i) NOK 3.20 per share, and (ii) five days volume weighted average price (VWAP) plus a 30 percent premium.
Furthermore, Vardar intends to become an equity partner in VGM Operatør AS, the Hønefoss plant, with an investment of NOK 50 million.
The investment (share subscription) will be completed when an offtake agreement for biocarbon from the production facility at Hønefoss has been signed.
We are delighted to welcome Vardar as a strategic partner. Vardar has a broad approach and commitment to accelerating the green transition, they play a central role in the energy system at Hønefoss and are an essential partner to realize the full potential of our large-scale production facility in the area, said Cecilie Jonassen, CEO of Vow Green Metals.
Aligned with environmental commitments
The strategic investment aligns well with Vardar and Vow Green Metals’ commitment to accelerate renewable energy production and emissions reduction at the industrial scale.
The parties expect to see significant synergies from the collaboration, including utilization of the parties’ combined competence and capabilities within energy production, thermal heat distribution and utilization, and biomass sourcing and handling.
Vardar Varme has invested in district heating infrastructure connecting the biocarbon production plant to its district heating network, enabling an annual energy offtake of up to 70 GWh for the biocarbon facility.
Today’s signing of the investment agreement with Vow Green Metals is a testament to our mission to contribute to increasing access to renewable energy and sustainable reduction of fossil emissions. We are looking forward to being a partner and contributor to bolster Vow Green Metals’ efforts in building a new green industry further and are especially excited to take part in the large-scale project in our backyard, said Robert Olsen, CEO of Vardar.
