EverGen Infrastructure may buy 67% of Alberta biogas project

In Canada, EverGen Infrastructure Corp., Canada’s Renewable Natural Gas Infrastructure Platform is pleased has entered into a letter of intent with Grow the Energy Circle Ltd. (“GrowTEC”) in its capacity as general partner of CKPPQ Farms LP, dated March 4, 2022, to acquire a 67% interest in a biogas facility in Alberta and to work with GrowTEC on developing and expanding the renewable gas output at such facility. This asset is a cornerstone Project in a strategic jurisdiction on which EverGen can continue to participate in the consolidation and growth of the RNG industry.

GrowTEC, located on the Perry Family farm near Lethbridge, Alberta, is a multi-faceted bioenergy venture of sustainable agriculture, integrating responsible best practices and renewable energy. At the core of GrowTEC is an operating farm scale anaerobic digester which converts biodegradable waste into biogas which is then upgraded to RNG for use in the gas grid. The Project has an offtake agreement with FortisBC and will contribute to FortisBC’s target to have at least 15% of its gas supply carbon neutral by 2030.

Under the terms of the LOI, EverGen will acquire a 67% interest in the Project either directly or through ownership in a newly formed special purpose vehicle corporation that will hold the assets of the Project, for $6.6 million consisting of an initial cash consideration of C$3.3 million and the issuance of 600,000 common shares of EverGen with a deemed value of C$5.50 per share. In addition, GrowTEC will have the right to nominate a director to the EverGen board at closing of the Proposed Transaction. Closing of the Proposed Transaction is expected to be completed in Spring of 2022.

The Project is currently in Phase 1 of development which is expected to produce 80,000 gigajoules of RNG annually and will be complete by Q3 2022. Upon closing of the Proposed Transaction, EverGen will work with the GrowTEC team to commence Phase 2 expansion which is expected to add an additional 60,000 gigajoules of RNG annually for a total of 140,000 gigajoules of RNG production annually from the Project. This increases RNG production capabilities by over 40% across EverGen’s core operated projects. Additional cash consideration of up to C$4.0 million will be made upon achievement of certain milestones. Consideration for EverGen’s interest in the Project will be funded from existing working capital and cash flow.