Varo Energy secures $3.3 B in boost to biogas goals
(Reuters) - Refiner and trader Varo Energy secured $3.33 B in its latest financing round, which will help to fund its sustainable energy projects, including its purchase of a stake in northern Europe’s biggest biogas facility, it said on Thursday.
The package includes $165 million as the company's first green loan - meaning it must fund projects with an environmental benefit. It will partly refinance Varo's acquisition of an 80% stake in Dutch biogas maker Bio Energy Coevorden (BEC).
"What this gives us is the financial flexibility to invest in what we think is a massive opportunity for our company in green business," Varo Chief Executive Officer Dev Sanyal told Reuters.
Varo, owned by Carlyle and energy trader Vitol, said strong demand meant it had added four new institutions to its existing lenders and the over-subscribed debt launch had raised $130 million more than the planned billion.
The remaining portion of the financing consisted of a $2.2 B borrowing base facility.
Lenders include Mizuho, ING, Societe Generale, HSBC and Santander.
In all Varo plans to invest around $3.5 B until 2026, two thirds of which will go toward its sustainable energies business, while around $140 million per year would sustain capital expenditure in hydrocarbons.
The green projects include hydrogen, biofuels, biogas, electric vehicles and nature-based carbon removal.
The company purchased its stake in BEC in January and seeks to double its biogas capacity by 2026. Last month Varo acquired Renewable Energy Services (RES), a trader of biogas and green certificates.
RES operates in 10 countries and sources the biogas from producers around the world.
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