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Transcontinental investment firm raising new fund

A climate-focused investment firm with a mandate to invest in clean fuels has hired a financial advisor to raise a second fund of between $700m and $1bn.

Climate Investment, the private equity firm with offices in London and Houston, is in the middle of raising a second fund up to $1bn, according to two sources familiar with the matter.

SocGen is assisting on the fundraise, which is scheduled to wrap up in 1Q24, the sources said.

Climate Investment has to date been making investments in early-stage companies. The second fund will be dedicated to more mature investment opportunities, one of the sources said.

The firm is in discussions with new LPs and is deliberately targeting strategics who can provide vertical integration capabilities and offtake, the same source said.

Representatives of Climate Investment declined to comment. SocGen did not respond to a request for comment.

Climate Investment was founded in 2016 by members of the Oil & Gas Climate Initiative (OGCI), who announced an investment of $1bn over ten years at the time. Since then the firm has made dozens of investments spanning transportation, infrastructure technology, renewable fuels and carbon capture.

The firm’s fuel investments include the UK and Oman-based company F2V (Flare to Value), Next Decade’s Rio Grande LNG project, Utah-based methane solutions firm Qnergy, and Texas natural gas CCS firm QuailRun Carbon, among others.

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Cement plant being decarbonized by TotalEnergies and Holcim

TotalEnergies and Holcim in Belgium have signed an MOU to work on the decarbonization of a cement production facility in Obourg, Belgium.

TotalEnergies and Holcim in Belgium have signed an MOU to work on the decarbonization of a cement production facility in Obourg, Belgium, according to a news release.

Various energies and technologies will be assessed for the efficient capture, utilization, and sequestration (CCUS) of around 1.3 million metric tons of CO2 per year.

The partnership will implement a new air-oxyfuel switchable kiln to capture and CO2 in the flue gases and TotalEnergies will use that CO2 for an e-fuel producing scheme and/or deposit it in geological storage in the North Sea.

“TotalEnergies will assess the development of renewable projects to power a new electrolyzer, which would generate the green hydrogen needed to produce e-fuels,” the release states. “This new renewable energy production capacity would also power Holcim’s new oxyfuel kiln, thus contributing to the decarbonization of the cement plant. Finally, the oxygen emitted by the electrolyzer would be used to fuel the new kiln.”

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Yara and Navigator invest in ammonia bunkering start-up

The investment is expected to enable the start-up, Azane, to begin construction of its first bunkering unit for ammonia supply in Norway.

Yara Growth Ventures AS, the venture investment arm of Yara International ASA, and Navigator Holdings Ltd. have each acquired a 14.5% interest in the Norwegian startup Azane Fuel Solutions AS, according to a news release.

Azane, a joint venture between ECONNECT Energy AS and Amon Maritime AS , both of Norway, was founded in Norway in 2020 as a company that develops proprietary technology and services for ammonia fuel handling, to facilitate the transition to green fuels for shipping.

Subject to customary conditions, Azane intends to build the world’s first ammonia bunkering network, with Yara Clean Ammonia already pre-ordering 15 units from Azane. The investment made by Yara and Navigator is expected to enable Azane to begin construction of its first bunkering unit for ammonia supply in Norway, aiming to kickstart the transition to zero-carbon fuels for maritime transportation. Future value creation for Azane is expected to come through international expansion with its bunkering solutions and broadening of its offerings in ammonia fuel handling technology.

The parties anticipate that the commencement of operations of the bunkering units will begin in Scandinavia in 2025. The total addressable market for ammonia powered ships is estimated to equal to the entire deep sea shipping fleet of 100,000 vessels worldwide, which over time is expected to transition to zero-carbon fuels. Currently, the world of ocean shipping accounts for approximately 3% of global emissions.

Azane is a commercial partner of Yara Clean Ammonia, who expects to provide clean ammonia to be stored in Azane’s bunkering units once operational.

“Currently ammonia fuel bunkering does not exist,” Stian Nygaard, Investment Director, Yara Growth Ventures, said. “With this investment it is expected to become a reality in a year, starting in Scandinavia. This is anticipated to be a huge milestone for reducing emissions from the shipping industry. By enabling Azane to be the first mover on providing this key part of the infrastructure, our goal is to fill a gap in the ammonia chain needed for fueling ships.”

Stian Nygaard is also joining the board to help build the company as a strategic investor.

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Australia rail-freight co. gets $5m grant for H2 trucks

Aurizon will put four hydrogen-fueled trucks on the road in Queensland.

Australian rail-freight company Aurizon has received a grant of $5m (AUD) from the government of Queensland.

Queensland Deputy Premier and Minister for State Development Steven Miles said Aurizon were a successful applicant through round two of the $35 million Hydrogen Industry Development Fund.

The announcement comes after the release of the Queensland Energy and Jobs Plan, the Palaszczuk Government’s plan for a bold clean energy future for Queensland including the biggest pumped hydro scheme in the world.

“Aurizon’s project will put four hydrogen-fueled prime movers on the road in Townsville and create more opportunities for other businesses to convert their transport fleets to new technology fuel,” Miles said in a news release.

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Exclusive: Carbon conversion startup planning capital raise

A Halliburton Labs-backed startup is developing a pilot plant in the Pacific Northwestern US, while forming financial relationships for an industrial-scale carbon conversion facility in the same location.

OCOchem, a Washington state-based carbon conversion startup, will seek new capital partners to build its first commercial scale facility in 2026, CEO Todd Brix said in an interview.

Starting in late 2024 or early 2025, the company will likely go to market for new liquidity – including project debt and equity, Brix said. He declined to talk about capex, but said the first commercial plant in Richland, Washington will cost “multiple tens of millions of dollars.”

The company is working with two EPCs now and is represented legally by Miller Nash law firm in the Pacific Northwest, Brix said. The company does not have a formal relationship with an investment bank but will likely form one for a Series A and later rounds.

“We’ve been in touch with a number of private equity and project finance people,” Brix said of early-stage discussions.

OCOchem is considering land options in Richland for its first plant and is organizing to begin permitting, Brix said. There is opportunity to form relationships with industrial partners in need of an offtaker for their CO2 emissions and new incremental revenue streams, as well as customers for chloral hydrates and other formic acid products.

“We expect to build hundreds of these plants all around the planet,” Brix said, referring to the process of electrochemically converting emitted CO2 and water to formic acid, which can then be used to make a suite of products like hydrogen, carbon monoxide, and formate (methanoate) derivatives. “We are close to industrial size on our plants right now.”

CO2 is captured from steam methane reformers, natural gas processing and piping, and ammonia production, among other processes. The gas is then combined with water in a cellular, modular process producing formic acid, derivatives of which can be used in a range of industries like pharmaceuticals.

The company recently raised $5m in seed funding from lead investor TO VC, which joined backers LCY Lee Family Office, MIH Capital Management, and Halliburton Labs. An additional $8m has been raised in grant funding from the US departments of Energy (DOE) and Defense (DOD).

The company is also partnered with the Nutrien Corporation on a small scale facility in Kennewick, Washington, just upriver from Richland, Brix said. Financing for that project is largely arranged with the FEED completed.

Brix owns a majority of the company with his father.

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Exclusive: Plug Power enlists bank to evaluate financing options

The cash-burning company is working with a bulge-bracket American bank to evaluate debt financing options to help stave off a liquidity crisis.

Plug Power is working with Goldman Sachs to evaluate a capital raise in the form of debt financing to shore up its balance sheet, sources said.

The New York-based company recently said it was at risk of a liquidity crisis in the next 12 months if it is not able to raise additional capital, noting it was exploring various options for bringing in financing.

Its total cash and cash equivalents as of September 30 stood at $567m, representing a decline of $580m for the quarter, according to SEC filings. The company also has nearly $1bn of restricted cash balances stemming from sale-leaseback transactions, of which $50m becomes available per quarter.

In a shareholder letter and on its 3Q23 earnings call, executives outlined the financing options that are on the table for the company, including a debt raise, funding from the Department of Energy’s Loan Programs Office, and bringing in project equity partners for its facilities.

The company is “evaluating varied debt financing solutions to support [its] growth,” according to the shareholder letter. CFO Paul Middleton added on the call that they’ve had “some expressions of offers for ABL-like facilities” as well as restricted cash advance facilities. 

CEO Andy Marsh said the company would need to raise between $500m – $600m, according to a news report from Barron’s.

Representatives of Plug Power and Goldman Sachs declined to comment.

Plug is also working towards a conditional commitment from the DOE Loan Program Office to finance plants in its green hydrogen network. 

“The framework that we’re working on with them is a $1.5bn platform that would fund our green plants and would fund from construction phase onwards,” CFO Middleton said, adding that the funding could amount to as much as 80% of the projects. 

Middleton said he expected the DOE loan, if granted, would start funding in early 2Q24, and could even be used to back lever some of its existing plants in Texas and New York.

The company’s stock traded today with a $2.34bn market cap, while its outstanding debt consists of a $200m convertible note issued in 2020.

The notes traded around 130 cents of par before Plug’s going concern announcement, and subsequently dropped to trade in the high-70s, with quotes this week in the 80s.

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Green hydrogen developer in active discussions for California FID this year

A green hydrogen developer is in active discussions with counterparties as it pursues a final investment decision for its first project.

Houston-based green hydrogen developer Element Resources is in active discussions to reach FID this year on its first green hydrogen project slated for Lancaster, California.

The company had engaged Houlihan Lokey in recent months to lead a capital raise for the project, according to two sources familiar with the matter. The Houlihan mandate had involved raising non-dilutive debt, a process that is believed to have been shelved, said one of the sources.

“We are steadily working our way to an FID this year and are pulling together all parts of the project,” Element CFO Avery Barnebey said via email in response to inquiries. He declined to comment further.

A Houlihan representative did not respond to an email seeking comment.

The Lancaster facility, which is targeted to begin commercial operations in early 2025, will be built on 1,165 acres and consist of 135 MW of solar-powered electrolysis capacity, according to the company’s website. At full capacity, the 18,750 mt per annum of hydrogen produced by the facility will serve the growing demand for clean mobility fuels as well as clean energy for manufacturing.

Element is led by founder and CEO Steve Meheen, an oil & gas industry veteran. Barnebey is a former director of corporate development at California Resources Corporation.

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