Pens Joint Venture with UK-based Shanks Group plc RICHMOND, Va.--(BUSINESS WIRE)--Intrinergy, a U.S.-based renewable energy company, and Shanks Group plc, a leading European waste management company, today announced closing €34 million ($47 million) in debt financing from NORD/LB, one of Germany’s leading renewable energy banks, to begin construction of Intrinergy VARE Holdings, a biomass energy project located in Belgium. The project, which has already received its permits, includes the greenfield development of a combined-heat-and-power (CHP) plant and a wood pellet manufacturing facility. The CHP plant, fueled by renewable biomass supplied by local Shanks subsidiary Foronex, will generate up to 12 MW of process steam and almost 5 MW of electrical power. The process steam and a portion of the electricity will power the co-located wood pellet manufacturing operation which will produce 50,000 tons per year of pellets, a fuel source used throughout the region as a substitute for heating oil and natural gas in residential and commercial buildings. The balance of renewable electricity will be sold under a long-term power purchase agreement and will generate Green Certificates, the equivalent of Renewable Energy Certificates (REC) used in the U.S. and ROCs in the U.K. The project finance package structured by Intrinergy and NORD/LB finances approximately 80% of the project with senior, secured non-recourse debt. Intrinergy and Shanks have invested the balance of the capital and will operate the project as a joint venture. “At a time when the credit markets are tightening, we’re delighted to be able to close on this transaction and extend Intrinergy’s renewable energy franchise across Europe,” said John Keppler, CEO of Intrinergy. “I believe this deal speaks to the power of Intrinergy’s ability to create investment grade opportunities in energy and the environment. We’re thrilled to partner with NORD/LB and Shanks on a project that will be an essential part of the global climate change solution.” The joint venture between Shanks and Intrinergy provides a secure, long-term supply of biomass feedstock for the project. Shanks, through its Foronex subsidiary, will manage the biomass feedstock consumed by the project and together with Intrinergy will jointly market the wood pellets. Biomass, such as sawdust and forestry residues, serves a dual role as both the energy source and the raw material used to manufacture the wood pellets. “Combining Shanks’ biomass resource expertise with Intrinergy’s CHP experience and wood pellet manufacturing and distribution expertise creates a robust business model that can potentially be used on future projects,” said Tom Drury, CEO of Shanks Group. Intrinergy currently operates a CHP and wood pellet manufacturing facility in Straubing, Germany. “Amid a challenging lending environment, a well-structured transaction and a strong management team gave us confidence in the overall credit attributes for this investment,” said Heiko Ludwig, the Head of Energy - Europe of NORD/LB. “In addition to our confidence in the parties involved and the solid business model and financial structure we have developed together, the renewable energy focus helps us reinforce NORD/LB’s commitment to the environment and sustainability.” Intrinergy VARE Holdings has awarded the engineer-procure-construct (EPC) contract to a consortium consisting of Areva Bioenergy GmbH of Germany, a subsidiary of Areva Bioenergies SAS, and KEM SA of Denmark. Under this contract, Areva and KEM will provide turnkey design, procurement, and construction services. The contractors have been mobilized and onsite work will commence over the next few months. Hunton & Williams LLP served as project counsel to the transaction, led by John Deacon in London and Herve Cogels in Brussels.
