EverGen Infrastructure Corp (TSX-V:EVGN), a renewable natural gas (RNG) company, has announced an acquisition that will mark the firm’s entry into the Ontario market and potentially tripling its RNG capacity.
The company said it entered into definitive agreements with Northeast Renewables LP on May 20, 2022 that will result in its acquisition of a 50% interest in Project Radius, a portfolio of RNG development projects in Ontario for $1.5 million in cash.
This investment, alongside its plan to acquire a 67% interest in Alberta-based GrowTec announced in March, positions EverGen as the leading RNG infrastructure platform in Canada, with a footprint in three of the four largest jurisdictions in the country with plans for further expansion.
READ: EverGen Infrastructure establishing itself quickly as a leader in the renewable natural gas energy space
Project Radius, consisting of three late-development-stage high-quality, on-farm RNG projects located in southern Ontario, is capable of producing a combined 1.7 million gigajoules (gj) per year and will be constructed throughout 2023 and 2024.
“The acquisition of Project Radius provides a foothold in Ontario – a new and strategic jurisdiction in which EverGen can continue to participate in the consolidation and growth of the RNG industry in the near-term, as well as benefit from project economics in line with or exceeding those we have seen with our initial projects,” EverGen CEO Chase Edgelow said in a statement.
The $1.5 million investment, which represents half the initial development funding tranche of $3 million, will help advance Project Radius to the Notice-to-Proceed (NTP) phase of development within the next six months, the company said.
Once NTP is reached, EverGen will have the right to participate in funding its proportionate share of the capital to construct large-scale anaerobic digesters that convert biodegradable waste into biogas, which is then upgraded to RNG for use in the gas grid, the company said.
EverGen also has a right of first offer to transition as the exclusive operator of Project Radius at the NTP phase.
Late-stage negotiations are ongoing for feedstock supply at the sites with multiple aggregators, as well as offtake agreements with utility-scale distribution companies, the company added.
“Working alongside Northeast to advance the projects, EverGen will deliver on our platform expansion commitments with the potential to exceed 1 million gj of RNG production annually. Ontario has an abundant amount of excess organic feedstock, and as a leader in the RNG industry, EverGen can develop the sustainable infrastructure that contributes to carbon-negative energy production and the greening of the province,” Edgelow said.
Project Radius can also move Ontario and Canada toward net-zero emissions, according to Northeast president Joshua Samuel.
“The team at Project Radius is dedicated to helping Ontario and Canada reach their net-zero emissions targets,” Samuel said. “Our RNG projects will reduce the carbon intensity of agricultural operations and natural gas customers, improve the competitiveness of growers and contribute to the local economy through construction jobs, purchase of materials and services and new full‑time employment.”
In a separate statement, EverGen announced plans to release its 2022 first-quarter financial results on Tuesday, May 24, 2022, after the market close.
EverGen said it will hold a results and corporate update conference call at 10.00am eastern time on Wednesday, May 25, 2022, hosted by its chief executive officer, Chase Edgelow. Conference call Zoom link: https://zoom.us/j/94839476091
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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