Renewable energy infrastructure investors Aurium Capital Markets (Aurium), Equitix and Helios Energy Investments (Helios) have formed a new dedicated business to invest in renewable energy plants which use anaerobic digestion (AD) technology.
The newly formed Bio Capital is developing a portfolio of AD plants in the UK and Ireland, targeting operational and greenfield assets, and comprising both gas-to-grid and electricity generation facilities that utilise food-waste and agri-feedstock fuel sources.
The business has already completed its first transaction, acquiring the largest operational AD plant in Scotland from Energen Biogas, a joint venture of Renewi plc (LSE: RWI) and Paragon Efficiencies. The plant in Cumbernauld, North Lanarkshire, processes 120,000 tonnes of food-waste per annum and generates 33GWh of electricity and 44GWh of biogas (which is converted into biomethane for injection into the gas grid) annually.
Bio Capital’s approach is to invest on an all-equity basis using the shareholders’ committed equity capital, and acquiring 100 per cent of the asset, or a controlling stake alongside local partners. This offers sellers certainty of execution whilst giving Bio Capital the freedom to pursue enhancement and expansion opportunities where desirable.
“With as many as 50 new gas-to-grid plants expected to be built in the UK over the next 18 months, AD is set to play a key role in driving the UK’s renewable energy capabilities. At the same time, we believe that the renewables sector is poised for a consolidation phase, and we will be well placed to take advantage of growth opportunities as they arise. We look forward to assessing and acting on these investment opportunities, institutionalising and driving sustained growth in this strategically important sector,” says Steven Blase, Partner, Aurium.
“We and our partners in Bio Capital believe that the management of a well-funded portfolio will help drive returns through operational, feedstock and financial economies of scale, as well as risk mitigation via geographic and technological diversification,” says Erez Gissin, Managing Partner of Helios.
Hugh Crossley, Chief Investment Officer at Equitix, adds: “Key to any successful partnership is identifying like-minded, trustworthy partners and we are delighted to have found just that in Aurium and Helios. Together, we are excited to be pursuing the wealth of opportunities that we see in the AD market and believe that our combined experience and expertise in renewable energy positions us well to generate consistent, attractive returns for investors.”
