Project finance, Project news, Raising capital

Exclusive: E-fuels developer raising $500m

A developer of green hydrogen for e-fuel products is looking for a more diverse set of backers for a recently launched Series C capital raise.

March 25, 2024

Ineratec, the German power-to-liquid fuels developer and technology provider, has launched a $500m Series C and could take on a US-based financial advisor to help, CEO Tim Boeltken said in an interview.

German boutique Pava Partners helped Ineratec on its $129m Series B, which was led by Piva Capital. The Series B raise, which was announced in January, also included participation from HG Ventures, TDK Ventures, Copec WIND Ventures, RockCreek, Emerald, Samsung Ventures as well as the increased support from current investors, including global corporates like ENGIE New Ventures, Safran Corporate Ventures and Honda.

The Series C can include equity, debt and project finance, Boeltken said.

The company, which takes a modular approach to fuels production, serves customers in Switzerland, Spain and Finland. Its e-fuels process involves two main steps: first, turning CO2 and hydrogen into synthesis gas, then using a second reactor to turn the synthesis gas into liquid and solid hydrocarbons, according to its website.

Growth in the US would include eventual rollout of its 100 MW commercial unit, none of which have been built to date. Now the company is focused on its 10 MW commercial units, following completion of a 1 MW industrial plant operating now.

In the next month Ineratec will be scouting locations in the US, Boeltken said, adding the the company is “hoping for many, many US installations” with eyes on additional applications in South America and Japan. The company also intends to establish a US headquarters.

Sites in New York and California are of first interest but there are also growth intentions in Texas, Washington state and Appalachia.

Ineratec is currently raising project finance for a “triple-digit” million capex project in the Europe, he said.

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M&A

TPG Rise acquires fuels testing and certification company

The target firm, AmSpec, increasingly facilitates the penetration of biofuels, hydrogen, sustainable aviation fuel, and other alternatives throughout the global fuel system.

TPG Rise Climate, the dedicated climate investing strategy of TPG’s global impact investing platform TPG Rise, has signed a definitive agreement to acquire AmSpec Group, Inc., one of the fastest growing Testing, Inspection, and Certification (TIC) companies specializing in energy, commodities, and fuels.

AmSpec’s existing majority shareholder, Olympus Partners, will retain a minority interest in the company. Additional terms of the investment were not disclosed.

Goldman Sachs and Baird served as financial advisors and Morgan Lewis served as legal counsel to AmSpec in relation to the transaction.

Founded in 1986, AmSpec operates an extensive global footprint of over 300 inspection sites and laboratories throughout 61 countries, many of which are located at key industrial centers, ports, or trade hubs. AmSpec’s core service involves testing and certifying the performance and emission qualities of fuels or commodities at each stage along the value chain.

By monitoring and reporting to regulators and independent certification bodies, AmSpec plays a key role in emissions controls and enforcement on conventional fuels, while also increasingly facilitating the penetration of biofuels, hydrogen, sustainable aviation fuel, and other alternatives throughout the global fuel system.

“As part of its broad set of services, AmSpec has developed deep expertise in the control of pollutants and emissions factors in legacy fuels, and they will play a critical role in processing, testing, and certifying the growing volume of increasingly complex renewable fuels that we see coming online,” said Marc Mezvinsky, Partner at TPG and senior member of its climate investing team. “We are thrilled to be investing in AmSpec’s best-in-class lab network at this inflection point in the global fuels mix, and we look forward to working closely with the management team to enter new markets and accelerate the global energy transition.”

As part of the transaction, Mezvinsky will join AmSpec’s Board of Directors along with TPG Rise Climate’s Roger Stone and Tracy Wolstencroft, a TPG Senior Advisor who served as former president and CEO of both the National Geographic Society and executive search and management consulting company Heidrick & Struggles. He also served as former chair of Goldman Sachs’ clean energy technology practice.

“Our commitment to innovation and service has made us a leader in the industry, and we are excited about what we will be able to accomplish with this new partnership. TPG Rise Climate has the resources, network, and vision to drive our next phase of growth, particularly as global supply chains rapidly change and the flows of critical molecules begin to transition,” said Matt Corr, CEO of AmSpec. “Our team is fully aligned with TPG on capturing the opportunity set in front of us and we are grateful to have Olympus’s continued partnership and support.”

The transaction is subject to regulatory review and customary closing conditions and is expected to close in the fourth quarter of 2023.

October 11, 2023

M&A

Apollo invests in hydrogen and CNG storage and transportation solutions provider

Apollo funds have acquired a majority interest in a manufacturer of cylinders that facilitate the use of natural gas and hydrogen.

Apollo-managed funds have acquired a majority interest in Composite Advanced Technologies, Inc, a provider of compressed natural gas (CNG), renewable natural gas (RNG) and hydrogen transportation and storage solutions in the United States, according to a news release.

CATEC’s products and services help its customers transition away from carbon-intensive fossil fuels towards cleaner alternatives. Founded in 2014 and based in Houston, CATEC manufactures large format Type IV cylinders that facilitate the use of natural gas and hydrogen across a wide variety of industry applications when mounted on mobile trailers or used in stationary applications.

TerraNova Capital served as financial advisor and Baker Botts L.L.P. acted as legal counsel to CATEC. Vinson & Elkins LLP acted as legal counsel to the Apollo Funds. Financial terms were not disclosed.

CATEC’s high capacity, lightweight trailers and storage solutions help end-customers decarbonize, while making lower carbon energy sources more accessible and affordable. Gaseous fuels are one important solution for reducing carbon emissions in certain ‘hard-to-abate’ sectors. As penetration of natural gas continues and the hydrogen economy grows, logistics are expected be a constraint and CATEC is an early mover in providing safe and efficient solutions for a wide range of end uses.

Apollo Funds intend to invest further capital behind the company, seeking to establish a leading gaseous equipment manufacturing and services platform with enhanced capabilities and customer offerings to support expansion in the high-growth hydrogen transport and storage market, the release states.

Apollo Partner Scott Browning said, “CATEC’s proprietary manufacturing capabilities are critical to supporting the growing market demand to reduce carbon emissions in ‘hard-to-decarbonize’ industries. The CATEC team has built an impressive business, which we believe can scale to become a one-stop-shop platform for serving the equipment needs of the compressed gas value chain through various expansion initiatives. We look forward to helping accelerate the Company’s growth trajectory in support of the broader energy transition.”

Alberto Chiesara, Co-Founder and President of CATEC, added, “We are pleased to join forces with Apollo Funds to help expand our capabilities and better support the growing adoption of low-carbon fuel solutions such as hydrogen, RNG and CNG. Apollo’s track record in energy transition investing, industry experience and significant resources make them an ideal partner for CATEC as we scale and embark on our next phase of growth.”

Co-Founder of CATEC Ryan Comerford said, “It has been a privilege to help lead the team, and I’m confident new management, with the backing of Apollo Funds, will position the Company for further growth and success.”

The transaction underscores Apollo’s commitment to driving a more sustainable future and long track record of investing in or lending to companies supporting the energy transition. Last year, Apollo launched its Sustainable Investing Platform, which targets to deploy $50 in clean energy and climate capital by 2027 and sees the opportunity to deploy more than $100bn by 2030. Over the last five years, Apollo Funds have deployed over $23bn into energy transition and sustainability-related investments, supporting companies and projects across clean energy and infrastructure, including offshore and onshore wind, solar, storage, renewable fuels, electric vehicles as well as a wide range of technologies to facilitate decarbonization.

August 22, 2023

Innovation, Project news, Raising capital

Sumitomo invests in Colorado direct air capture company

Sumitomo’s investment in Global Thermostat includes a commercial partnership to develop projects in the US, Europe, Middle East and Asia markets.

Sumitomo Corporation, through the Group’s U.S.-based Presidio Ventures, Inc., has announced its investment in Global Thermostat, PBC, a U.S.-based company that develops and deploys a leading technology for directly capturing carbon dioxide from the atmosphere, according to a news release.

In conjunction with the investment, the companies have signed a letter of intent to develop a new line of global business for carbon capture and sequestration centered around Global Thermostat’s pioneering Direct Air Capture (DAC) technology.

DAC technology directly captures CO2 from the atmosphere and has attracted attention as one of the leading potential solutions for achieving negative emissions on a large scale. When used in combination with underground storage or mineralization solutions, it is likely to have a key role in reducing atmospheric carbon dioxide.

Global Thermostat has been developing DAC technology for more than a decade and has been recognized by the International Energy Agency (IEA) as one of the leading international companies developing large-scale DAC technology. In continually advancing its capture system, the firm has developed a proprietary solution consisting of fans which blow air through contactors with customized surface geometry and sorbents to optimize CO2 capture rates and overall cost.

At the end of 2022, Global Thermostat succeeded in putting a commercial-scale DAC facility into operation at its U.S. headquarters in Commerce City, Colorado, with the capacity to capture more than 1,000 metric tons of CO2 per year, one of the largest operating DAC plants ever. It is now expanding its operations globally.By combining Sumitomo Corporation’s global network and Global Thermostat’s leading DAC technology, the two companies will jointly identify and develop business opportunities in Carbon Capture, Utilization, and Storage (CCUS), including both underground storage and mineralization, in the U.S., Europe, Middle East and Asia markets.

The capturing and sequestration of atmospheric carbon is widely recognized as essential to keeping the global temperature rise below the 1.5 degree target. Together, Sumitomo and Global Thermostat aspire to establish a complete economic system that will provide a foundation for the widespread, global implementation of Direct Air Capture.

In developing the carbon capture value chain, Sumitomo Corporation and Global Thermostat will also explore opportunities in the production of e-fuels, produced by synthesizing CO2 and hydrogen.

“We are excited to be Sumitomo’s technology partner as we pursue our goal of a carbon-neutral economy. Our proven and fundamentally advantaged technology will enable the cost-effective and efficient capturing of atmospheric CO2 for sequestration or commercial uses,” said Paul Nahi, CEO of Global Thermostat.

Shinichi “Sandro” Hasegawa, Head of Energy Innovation Initiative America for Sumitomo Corporation of Americas, commented, “We are pleased to sign a letter of intent for a commercial partnership with Global Thermostat. We believe that DAC is one of the most important technologies for addressing climate change and the realization of a carbon-neutral society.

“Through our collaboration with Global Thermostat, we will promote and realize carbon dioxide removal from ambient air through Direct Air Capture with Carbon Storage, as well as focus on synthetic fuel production based on the captured CO2,” said Hasegawa.

June 1, 2023

exclusive

M&A, Project news, Raising capital

Hydrogen firm launches equity raise

A US hydrogen infrastructure and project development outfit has mandated a banker to conduct a raise for equity and project capital.

Lifte H2, the Boston-based hydrogen infrastructure and project developer, has mandated a banker to conduct a Series A capital raise, according to two sources familiar with the matter.

Energy & Industrial Advisory Partners is running the process, which launched recently, the sources said. Lifte H2 is seeking equity in the topco and development capital for its first project.

Talks with strategic and financial investors are being conducted now.

Lifte H2, which also has offices in Berlin, is led by Co-founder and CEO Matthew Blieske, who served as global hydrogen product manager for Shell before starting Lifte H2 in 2021. The founding team also includes Jeremy Manaus, Angela Akroyd, Richard Zhang, Paul Karzel, and Richard Wiens, all of whom previously worked at Shell.

In January, the company launched two hydrogen transport and dispensing products, the MACH₂ Mobile Refueler, which is a combination dispenser and high-capacity trailer; and the MACH2 High-Capacity Hydrogen Trailer, which has a capacity of 1,330 kg at approximately 550 bar and, according to the company, enables the lowest cost per kilogram for over-the-road transport.

The company signed an MOU last year with Swiss compressor manufacturer Burckhardt Compression to develop a joint offering of hydrogen solutions.

April 14, 2023

Innovation, Project finance, Project news, Raising capital

Exclusive: Waste-to-fuels developer preparing capital raise

A waste-to-fuels developer has lined up an advisor and is planning a capital raise for a project in West Texas, in what is expected to be the first of up to 20 similar fundraising efforts totaling $500m in external capital needs.

Recover, Inc., a Calgary-based waste-to-fuels project developer, is preparing to launch a capital raise for its first US-based projects in West Texas.

The company has lined up CIBC to assist with the capital raise while a large Canadian Crown Corporation is expected to sign on as a lending partner for the debt portion of the cap stack, CFO Shane Kozak said in an interview.

Kozak said he will need to raise $70m – $75m for the West Texas project, which will process waste from oil and gas drilling fluids and recover 800 barrels per day of low carbon intensity diesel fuel from 800 tons of waste.

Existing equity backers Azimuth Capital and BDC will participate in the capital raise, but the company is seeking additional project equity investors to take part in a 60% debt to 40% equity capital structure, Kozak said.

While the cost of the West Texas project is estimated at $55m, the company needs to raise approximately $70m to account for debt servicing and underwriting fees, he added.

Recover has mapped out a strategy to build 20 projects in oil and gas basins across the US, and estimates it will need to raise $500m in external capital over 10 years to fully develop those projects.

Project model

The company already operates a similar facility in Alberta that became operational in 2018, at a cost of CAD 20m and producing about half of what the West Texas project will produce.

“This has been commercially proven in Canada, and we’re going to a better market with a lot more drilling waste production” in the US, Kozak said.

The waste stream from oil and gas drilling contains large amounts of diesel fuel: a typical well will create 400 – 500 tons of waste, 30%-40% of which is recoverable low carbon intensity diesel, Kozak said.

In Texas, the drilling fluid waste often ends up in pits near drilling rigs or in industrial landfills, where it biodegrades over time and emits CO2 and methane into the atmosphere.

“We significantly reduce GHG emissions and create a fuel source that can be reused, and every barrel that we recover is a barrel of fuel that would otherwise have to come from a fossil fuel source,” he said.

Recent changes to Texas policy regarding oil and gas drilling waste could increase the availability of feedstock for the company. The Texas RailRoad Commission, which oversees the state’s oil and gas industry, is seeking to modernize disposal practices that would redirect waste from drilling pits to more centralized industrial landfills.

“The good thing for us is that, in the Permian Basin, about 70% – 80% of the wells use these pits, and our strategy is to build our facility directly on industrial landfills,” Kozak said.

Recover is working with a large landfill management company with operations across the US to develop its facilities, he added. The company does not pay for feedstock, given the synergistic relationship between Recover and the landfill management company.

November 1, 2023

exclusive

Raising capital

Methanol-to-hydrogen firm planning capital raise

An early-stage provider of distributed methanol-to-hydrogen solutions is planning a capital raise as it scales up.

Kaizen Clean Energy, a Houston-based methanol-to-hydrogen fuel company, is planning to raise additional capital in support of upcoming projects.

The company, which uses methanol and water to produce hydrogen with modular units, recently completed a funding round led by Balcor Companies, in which Balcor took a minority interest in Kaizen.

Additional funding in the capital raise was provided by friends and family, Kaizen co-founder and chief commercial officer Eric Smith said in an interview.

But with its sights on larger project opportunities this year, the company is already targeting an additional capital raise to support continued growth, Smith said. He declined to comment further on the capital raise and potential advisors, but noted that the company’s CFO, Craig Klaasmeyer, is a former Credit Suisse banker.

Kaizen’s methanol model utilizes a generator license from Element 1 and adds in systems to produce power or hydrogen, targeting the diesel generator market, EV charging and microgrids as well as hydrogen fueling and industrial uses.

Compared to trucking in hydrogen, the model using methanol, an abundant chemical, cuts costs by around 50%, Smith said, noting that Kaizen’s containers are at cost parity with diesel.

In addition, the Kaizen container is cleaner than alternatives, producing no nitric or sulfur oxide, according to Smith. Its carbon intensity score is 45, compared to 90 for the California electric grid and 100 for diesel generators.

Smith also touts a streamlined permitting process for Kaizen’s containerized product. The company recently received a letter of exemption for the container from a California air district due to low or no emissions. The product similarly does not require a California state permit and similarly, when off grid, no city permits are required, he added.

July 25, 2023