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Sumitomo eyeing stake in Calgary carbon capture project

Sumitomo has been granted the right to acquire an equity interest in the East Calgary Carbon Transportation & Sequestration Project.

Reconciliation Energy Transition Inc. and Sumitomo Corporation of Americas, a subsidiary of Sumitomo Corporation, have entered into an agreement whereby RETI has granted Sumitomo the exclusive right to acquire a significant equity interest in the East Calgary Carbon Transportation & Sequestration Project.

The CTS Hub is a proposed CO2 transportation and sequestration development project that is expected to involve constructing compression capacity, a COpipeline network, and injection and monitoring wells to support permanent sequestration of CO2 in deep saline aquifers at a location east of Calgary, according to a news release.

The project has an estimated first phase targeted CO2 storage volume of 3.0 million tonnes per annum.

“We are pleased to welcome Sumitomo to our East Calgary CTS Hub. They are one of the world’s leading trading and business investment companies and we are excited to work with their dedicated CCUS team. This partnership, with our commitment to Indigenous ownership, is a pivotal step to bring the CTS project to fruition.” said Stephen Mason, Chairman & CEO of RETI.

“We are delighted to partner with RETI and its commitment to meaningful Indigenous ownership on the development of the CTS Hub. The mitigation of climate change is one of our key areas of focus and we recognize that CCUS is a key technology in that battle,” said Shinichi “Sandro” Hasegawa, General Manager of Energy Innovation Initiative Americas at Sumitomo Corporation of Americas.

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E.P.A. makes selections for $20bn greenhouse gas reduction fund

The EPA announced its selections for $20bn in grant awards under two competitions within the $27 billion Greenhouse Gas Reduction Fund, established by the Inflation Reduction Act.

The U.S. Environmental Protection Agency has announced its selections for $20bn in grant awards under two competitions within the $27 billion Greenhouse Gas Reduction Fund (GGRF), which was created under the Inflation Reduction Act as part of President Biden’s Investing in America agenda, according to a news release.

The three selections under the $14bn National Clean Investment Fund and five selections under the $6bn Clean Communities Investment Accelerator will create a national clean financing network for clean energy and climate solutions across sectors, ensuring communities have access to the capital they need to participate in and benefit from a cleaner, more sustainable economy.

By financing tens of thousands of projects, this national clean financing network will mobilize private capital to reduce climate and air pollution while also reducing energy costs, improving public health, and creating good-paying clean energy jobs in communities across the country, especially in low-income and disadvantaged communities.

National Clean Investment Fund (NCIF) Selectees

Under the $14 billion National Clean Investment Fund, the three selected applicants will establish national clean financing institutions that deliver accessible, affordable financing for clean technology projects nationwide, partnering with private-sector investors, developers, community organizations, and others to deploy projects, mobilize private capital at scale, and enable millions of Americans to benefit from the program through energy bill savings, cleaner air, job creation, and more. Additional details on each of the three selected applicants, including the narrative proposals that were submitted to EPA as part of the application process, can be found on EPA’s Greenhouse Gas Reduction Fund NCIF website.

All three selected applicants surpassed the program requirement of dedicating a minimum of 40% of capital to low-income and disadvantaged communities. The three selected applicants are:

  • Climate United Fund ($6.97 billion award), a nonprofit formed by Calvert Impact to partner with two U.S. Treasury-certified Community Development Financial Institutions (CDFIs), Self-Help Ventures Fund and Community Preservation Corporation. Together, these three nonprofit financial institutions bring a decades-long track record of successfully raising and deploying $30 billion in capital with a focus on low-income and disadvantaged communities. Climate United Fund’s program will focus on investing in harder-to-reach market segments like consumers, small businesses, small farms, community facilities, and schools—with at least 60% of its investments in low-income and disadvantaged communities, 20% in rural communities, and 10% in Tribal communities.
  • Coalition for Green Capital ($5 billion award), a nonprofit with almost 15 years of experience helping establish and work with dozens of state, local, and nonprofit green banks that have already catalyzed $20 billion into qualified projects—and that have a pipeline of $30 billion of demand for green bank capital that could be coupled with more than twice that in private investment. The Coalition for Green Capital’s program will have particular emphasis on public-private investing and will leverage the existing and growing national network of green banks as a key distribution channel for investment—with at least 50% of investments in low-income and disadvantaged communities.
  • Power Forward Communities ($2 billion award), a nonprofit coalition formed by five of the country’s most trusted housing, climate, and community investment groups that is dedicated to decarbonizing and transforming American housing to save homeowners and renters money, reinvest in communities, and tackle the climate crisis. The coalition members—Enterprise Community Partners, LISC (Local Initiatives Support Corporation), Rewiring America, Habitat for Humanity, and United Way—will draw on their decades of experience, which includes deploying over $100 billion in community-based initiatives and investments, to build and lead a national financing program providing customized and affordable solutions for single-family and multi-family housing owners and developers—with at least 75% of investments in low-income and disadvantaged communities.

Clean Communities Investment Accelerator (CCIA) Selectees

Under the $6 billion Clean Communities Investment Accelerator, the five selected applicants will establish hubs that provide funding and technical assistance to community lenders working in low-income and disadvantaged communities, providing an immediate pathway to deploy projects in those communities while also building capacity of hundreds of community lenders to finance projects for years. Each of the selectees will provide capitalization funding (typically up to $10 million per community lender), technical assistance subawards (typically up to $1 million per community lender), and technical assistance services so that community lenders can provide financial assistance to deploy distributed energy, net-zero buildings, and zero-emissions transportation projects where they are needed most. 100% of capital under the CCIA is dedicated to low-income and disadvantaged communities. Additional details on each of the five selected applicants, including the narrative proposals that were submitted to EPA as part of the application process, can be found on EPA’s Greenhouse Gas Reduction Fund CCIA website.

The five selected applicants are:

  • Opportunity Finance Network ($2.29 billion award), a ~40-year-old nonprofit CDFI Intermediary that provides capital and capacity building for a national network of 400+ community lenders—predominantly U.S. Treasury-certified CDFI Loan Funds—which collectively hold $42 billion in assets and serve all 50 states, the District of Columbia, and several U.S. territories.
  • Inclusiv ($1.87 billion award), a ~50-year-old nonprofit CDFI Intermediary that provides capital and capacity building for a national network of 900+ mission-driven, regulated credit unions—which include CDFIs and financial cooperativas in Puerto Rico—that collectively manage $330 billion in assets and serve 23 million individuals across the country.
  • Justice Climate Fund ($940 million award), a purpose-built nonprofit supported by an existing ecosystem of coalition members, a national network of more than 1,200 community lenders, and ImpactAssets—an experienced nonprofit with $3 billion under management—to provide responsible, clean energy-focused capital and capacity building to community lenders across the country.
  • Appalachian Community Capital ($500 million award), a nonprofit CDFI with a decade of experience working with community lenders in Appalachian communities, which is launching the Green Bank for Rural America to deliver clean capital and capacity building assistance to hundreds of community lenders working in coal, energy, underserved rural, and Tribal communities across the United States.
  • Native CDFI Network ($400 million award), a nonprofit that serves as national voice and advocate for the 60+ U.S. Treasury-certified Native CDFIs, which have a presence in 27 states across rural reservation communities as well as urban communities and have a mission to address capital access challenges in Native communities.
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Atome seeking project finance for Paraguayan fertilizer project

The UK-based developer is seeking investors for a green fertilizer project in Paraguay to serve the South American and European markets.

Atome, the UK-based green hydrogen, ammonia, and fertilizer project development company, has issued a notice to seek project financing for a fertilizer project in Paraguay, according to information from the company.

The financing is for Phase 1 of the Villeta project, issued by Natixis Corporate & Investment Banking. The project will deliver green fertilizer to both South American and European markets.

The publicly traded company has large-scale projects in Latin America and Europe.

Carbon footprint analytics indicate a significant amount of carbon credit revenue generation, with some 500,000 credits potential each year, an alert sent out by the company states.

Management will present to all shareholders on 6 September at 11 a.m. BST. IDB Invest, the Washington DC based multilateral for the Americas, is already onboard with a signed mandate.

Initial carbon footprint analysis indicates a potential displacement of some 500,000 tons of carbon dioxide-equivalent each year from the production of green fertilizer at Villeta.

“As a result, the company estimates that it has the potential to generate approximately 500,000 valuable carbon credits each year,” company materials state.

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Aemetis closes $25m USDA loan to fund eight additional projects

When completed, the biogas digesters for the combined 15 dairies are designed to produce more than 400,000 MMBtus per year of carbon negative renewable natural gas.

Aemetis, Inc., a renewable natural gas and renewable fuels company focused on negative carbon intensity products, has closed its second $25m, 20-year term loan guaranteed by the U.S. Department of Agriculture (USDA) for a total of $50m of Aemetis Biogas project financing arranged by Greater Commercial Lending (GCL) in the past nine months.

The Aemetis Biogas Central Dairy RNG Project is now fully funded to build biogas digesters and related assets for eight additional dairies using the $9.4m of equity financing already provided by Aemetis and the $25m of new debt financing guaranteed by the USDA. Magnolia Bank of Elizabethtown, Kentucky provided the primary funding for the $25 million loan to Aemetis Biogas 2, LLC (AB-2), a wholly-owned subsidiary of Aemetis, Inc, according to a news release.

“The USDA Renewable Energy for America Program (REAP) provides long term, 20-year financing that enables the construction of projects that improve air quality and reduce carbon pollution such as the Aemetis Biogas Central Dairy Digester Project,” stated Eric McAfee, Chairman and CEO of Aemetis. “We appreciate the good working relationship that has been developed with the team at Greater Commercial Lending and we are pleased to have Magnolia Bank as the new primary lender for the AB-2 phase of the project.”

Aemetis Biogas has built and is fully operating dairy biogas digesters for seven dairies, a 40-mile biogas pipeline, the central biogas-to-RNG production facility and the PG&E gas utility interconnection unit. When completed, the biogas digesters for the combined 15 dairies are designed to produce more than 400,000 MMBtus per year of carbon negative renewable natural gas.

The long-term, 20-year project financing was guaranteed by the USDA through the Rural Energy for America Program (REAP) and carries approximately an 8.75% fixed interest rate for the first five years. With two REAP loans closed and three more REAP loans in process, Aemetis Biogas is currently arranging $125 million of 20-year debt funding for the development, construction and operation of the Aemetis Central Dairy Digester project which has already signed 37 dairies and plans to build digesters for 65 dairies within the next 60 months.

Aemetis Biogas is building passive solar anaerobic digesters at dairies to capture biomethane from animal waste. After removal of key contaminants and gas pressurization at the dairy, a biogas pipeline connects the dairies to a central facility located at the Keyes ethanol plant where the biogas is converted into below zero carbon intensity RNG. The RNG is tested and odorized in an interconnection unit, then injected into the Pacific Gas and Electric (PG&E) gas pipeline for delivery to transportation fuel customers throughout California. In addition to delivery of RNG through third parties, Aemetis is building an onsite RNG fueling station to fuel local trucks.

About 25% of the methane emissions in California are emitted from dairy waste lagoons. When fully built, the Aemetis biogas project plans to connect dairy digesters spanning more than 65 dairy farms, producing more than 1,650,000 MMBtu of renewable natural gas from captured dairy methane each year. The project is designed to reduce greenhouse gas emissions equivalent to an estimated 6.8 million metric tonnes of carbon dioxide over ten years, equal to removing the emissions from approximately 150,000 cars per year.

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Exclusive: Pattern Energy developing $9bn Texas green ammonia project

One of the largest operators of renewable energy in the Americas, San Francisco-based Pattern is advancing a 1-million-ton-per-year green ammonia project in Texas.

Pattern Energy knows a thing or two about large renewable energy projects.

It built Western Spirit Wind, a 1,050 MW project in New Mexico representing the largest wind power resource ever constructed in a single phase in the Americas. And it has broken ground on SunZia, a 3.5 GW wind project in the same state – the largest of its kind in the Western Hemisphere.

Now it is pursuing a 1-million-ton-per-year green ammonia project in Corpus Christi, Texas, at an expected cost of $9bn, according to Erika Taugher, a director at Pattern.

The facility is projected to come online in 2028, and is just one of four green hydrogen projects the company is developing. The Argentia Renewables project in Newfoundland and Labrador, Canada is marching toward the start of construction next year, and Pattern is also pursuing two earlier-stage projects in Texas, Taugher said in an interview.

The Corpus Christi project consists of a new renewables project, electrolyzers, storage, and a pipeline, because the electrolyzer site is away from the seaport. It also includes a marine fuels terminal and an ammonia synthesis plant.

Pattern has renewable assets in West and South Texas and is acquiring additional land to build new renewables that would allow for tax incentives that require additionality, Taugher said.

Financing for the project is still coming together, with JV partners and prospective offtakers likely to take project equity stakes along with potential outside equity investors. No bank has been mandated yet for the financing.

Argentia

At the Argentia project, Pattern is building 300 MW of wind power to produce 90 tons per day of green hydrogen, which will be used to make approximately 400 tons per day of green ammonia. The ammonia will be shipped to counterparties in Europe, offtake contracts for which are still under negotiation.

“The Canadian project is particularly exciting because we’re not waiting on policy to determine how it’s being built,” Taugher said. “The wind is directly powering our electrolyzers there, and any additional grid power that we need from the utility is coming from a clean grid, comprised of hydropower.“

“We don’t need to wait for rules on time-matching and additionality,” she added, but noted the renewables will likely benefit from Canada’s investment tax credits, which would mean the resulting ammonia may not qualify under Europe’s rules for renewable fuels of non-biological origin (RFNBO) as recently enacted.

Many of the potential offtakers are similarly considering taking equity stakes in the Argentia project, Taugher added.

Domestic offtake

Pattern is also pursuing two early-stage projects in Texas that would seek to provide green hydrogen to the domestic offtake market.

In the Texas Panhandle, Pattern is looking to repower existing wind assets and add more wind and solar capacity that would power green hydrogen production.

In the Permian Basin, the company has optioned land and is conducting environmental and water feasibility studies to prove out the case for green hydrogen. Pattern is considering local offtake and is also in discussions to tie into a pipeline that would transport the hydrogen to the Gulf Coast.

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exclusive

US gas compression firm raising $432m

A Houston-based CNG company is raising money to develop a virtual marine pipeline between the US Gulf Coast and the Caribbean.

Andalusian Energy, a natural gas compression, export and transportation company, is undergoing a $432m capital raise to develop and build a compression and filling station in Plaquemines Parish, Louisiana and export line to Honduras, according to two sources familiar with the matter.

Whitehall & Co. is advising on the transaction, the sources said. Capital allocation will also support the purchase of CNG containers and destination port improvements in Puerto Cortes, Honduras.

Targeted initial equity is $168m, or 40%, according to a teaser seen by The Hydrogen Source. Targeted COD of the project is 2H25.

Gross-cumulative investment could exceed $2bn. The phase I estimated project cost of approximately $421m is expected to be split 40% to permanent equity capital ($168m) and 60% to structured debt ($253m).

Andalusian uses lightweight composite cylinders to ship compressed natural gas (CNG) at ambient temperature to the Caribbean, Central America and eastern Mexico. Marketing materials state the process is lower cost than shipping liquefied natural gas (LNG).

The company has installed a demonstration facility in Choloma, Honduras to import natural gas from CNG.

The Louisiana compression facility will be constructed with two adjacent docks and a site with utility connections. Natural gas will be supplied using a combination of regional pipeline networks including Southern Natural Gas pipeline and High Point Gas Transmission Pipeline. An agreement has been reached to provide interconnection and construction of a 1.5 mile lateral.

Andalusian completed its development capital raise with a strategic investment by MAN Energy Solutions USA, a division of Volkswagen AG, and equity investments by HBG, Progressive Energy and Grupo IDC.

Additional marine engineering, consulting, and ship classification services are being provided by DNV GL and confirmed by the Norwegian Maritime Authority.

Additionally, to monetize spare ship capacity and based on a contract to deliver CNG to an IPP in Honduras, Andalusian has reached an agreement with a global shipping company to transport commercial container cargo between Louisiana and Honduras, the teaser states.

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Exclusive: Residential microgrid developer to seek electrolysis partner, raise capital

A developer of planned microgrid communities will look for an electrolysis partner to provide green hydrogen for use in agricultural applications and is planning to go to market for platform equity and project debt.

Embark Fund and NOVA Constructors, a group of real estate development interests focused on developing three planned residential communities, will look for an electrolysis partner for its community microgrid development efforts, managing partner Craig McBurney said in an interview.

McBurney, who is also solar development manager for the South Carolina-based renewables developer Alder Energy, said the partners are in the process of acquiring land – between 1,500 and 2,000 acres per parcel – in Virginia, Maryland and Illinois. The latter project is the most advanced.

Each is for a planned residential community including microgrid development, he said. The communities will include renewables, which could be used to power electrolysis during times of low demand. He gave the example of a 30 MW solar ground array.  

“We are preparing to announce a [$60m to $80m] equity raise,” McBurney said, adding that between $240m and $300m of debt will also be required. The money will be used for site acquisition, development and EPC. “The whole capital stack is an opportunity.”  

The group has not formally engaged with an investment bank or financial advisor, he said. They will be targeting private equity, sovereign wealth funds, and family offices.

McBurney pointed to communities like Whisper Valley in Texas and Babcock Ranch in Florida as examples of his group’s efforts to develop sustainable off-grid communities.

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