Harvestone Low Carbon Partners, LP (HLCP), a low-carbon biofuels producer, and a portfolio company of Energy Capital Partners (ECP), today announced that it closed a first-of-its kind tax equity financing with Bank of America.
The $205m transaction is associated with HLCP’s wholly owned subsidiary, Blue Flint Ethanol and associated Blue Flint companies (BFE), located near Underwood, North Dakota, which together, are generating, capturing, and sequestering biogenic carbon dioxide (CO2), according to a news release.
The facility began injecting CO2 last year.
Blue Flint is only the third biorefinery in the United States to capture its CO2 emissions and it is the first Carbon Capture and Storage (CCS) entity to commence carbon capture operations following the August 2022 passage of the Inflation Reduction Act, the release states. Operations commenced in October 2023 and more than 125,000 metric tons of CO2 have already been captured and sequestered. Going forward, the facility is expected to capture over 200,000 metric tons of CO2 per year – the equivalent CO2 emissions of nearly 42,000 vehicles.
As the owner of the entire value chain, HLCP had a unique opportunity to structure a tax equity financing that enabled Bank of America to participate in the 45Q federal tax credits and, when available, to purchase 45Z clean fuel tax credits generated by the biorefinery facility. All tax credits generated by the Blue Flint assets are generated in connection with carbon capture and sequestration (CCS) infrastructure which captures the biogenic carbon dioxide emissions released during the production process. Upon capturing the CO2, it is compressed to a liquid and safely and permanently injected into a deep underground geologic formation via a Class VI injection well.
“Blue Flint’s carbon capture and sequestration project has helped the facility dramatically reduce emissions, produce ethanol with a significantly lower carbon intensity score, and strengthen the ethanol and agricultural markets for North Dakota,” said HLCP CEO, Jeff Zueger.
“We want to thank our new partners at Bank of America for joining us to help lower CO2 emissions at our North Dakota facility and, through its recent and ongoing investment in these assets, supporting the development of one of the first biorefinery carbon capture projects in the United States,” added HLCP CFO, Marc Stratton.
“We have built a strong track record of innovative financing transactions for decarbonization technologies including carbon capture and sequestration. We are engaging with all of our clients including partners like Harvestone and providing them a full suite of financial solutions tailored to meet their needs as they take steps to transition to a more sustainable future,” said Karen Fang, Global Head of Sustainable Finance at Bank of America.
CRC-IB served as financial advisor to HLCP advising on structuring and commercial matters related to this first-of-its-kind tax equity financing. Latham & Watkins served as HLCP’s legal advisor and Milbank served as Bank of America’s legal advisor.
