Overview

Future Biogas is one of the largest anaerobic digestion (AD) plant developers and biogas producers in the UK, operating 11 AD plants on behalf of institutional investors under long-term contracts.

Future Biogas’s plants convert a wide range of feedstocks into clean and renewable energy through AD which produces biogas. Biogas can either be used to generate green electricity, or upgraded into biomethane and injected into the UK’s national gas network. Future Biogas produces over 500GWh of biogas per year, enough energy for over 40,000 homes.

Biomethane from AD is a ready-to-use and commercially-viable solution for hard to decarbonise industrial sectors. It does not require any upgrade to the existing UK gas infrastructure. Energy produced by AD plants is carbon neutral, as the CO2 released during the process matches the CO2 absorbed from the atmosphere by the feedstock.

Future Biogas promotes a regenerative farming approach, sustainably integrating feedstock from energy crops into agricultural systems. The circular process of returning digestate back to land can help replenish soil nutrients and carbon and displaces demand for carbon intensive artificial fertilisers.

Highlights

• Future Biogas is the largest producer of biomethane in the nascent UK market and a highly experienced developer and operator of AD plants, with full-service capabilities in development, construction and operations.

• There is strong political support and growing corporate demand for domestically-produced biomethane, which, as a direct substitute for fossil natural gas, has an essential role to play in decarbonising some of the UK’s gas dependent sectors such as heat, transport and manufacturing.

• On a national scale, the use of biomethane (vs. natural gas) allows the existing gas infrastructure to help meet the UK Government’s Net Zero and energy security targets without any change to the existing system.

• Future Biogas will develop a new generation of unsubsidised AD plants and sell the resulting biomethane under long-term offtake agreements to corporate buyers.

• In the longer term, Future Biogas intends to enter the nascent but high potential voluntary carbon offset market through carbon capture and storage.

• Future Biogas has a highly experienced management team with a strong track record in the sector.

Regulatory information 
This transaction involved a recommendation of 3i Investments plc.

Overview

Herambiente is the Italian leader in the waste treatment and disposal sector. The company owns and operates a portfolio of c.80 waste treatment facilities, mostly located in the Emilia Romagna. The plants include landfills, waste to energy plants, anaerobic digestion and other waste sorting facilities.

Herambiente’s revenues originate primarily from waste treatment and disposal and from sale of the resulting by-products, including electricity from incineration, biogas from landfills and recycled materials. In 2016, Herambiente treated c. 1.7m tons of urban waste, 4.7m tons of special waste and produced 161,455,167kWh of electricity.

Investment rationale

• Strong market position in its home region of Emilia Romagna and more broadly in Northern and Central Italy
• The large plants portfolio provides technology diversification and exposure to increased recycling across Europe
• The highly fragmented market offers significant consolidation opportunities
• The expertise and environmental permits required to build new facilities provide significant barriers to entry

Regulatory information 
This transaction involved a recommendation of 3i Investments plc.

Overview

Infinis is the largest generator of electricity from landfill gas in the UK, with a portfolio of more than 150 operational sites and total installed capacity of over 400MW.

Recent developments

• Financial performance at Infinis is strong, driven by higher power prices and price volatility which benefitted the power response assets in particular. Infinis’s cashflows are positively correlated with UK inflation through index-linked corporate PPAs and the Government-backed Renewables Obligations Certificate and CfD regimes.
• Infinis has made significant progress establishing a 1.5GW solar and battery pipeline across various stages of development. 103MW of Solar and 16 MW of Battery are currently under construction and on schedule to start generating by summer 2023, which will bring Infinis’s operational asset base to over 550MW. Higher development capex has been offset by a corresponding increase in long-term forecast power prices. 

Regulatory information 
This transaction involved a recommendation of 3i Investments plc.

Overview

Valorem is a leading independent renewable energy development and operating company. It is one of the largest onshore wind developers in France, having developed over 600MW of capacity over the last 10 years.

Recent developments

• The year to 31 March 2023 was a very strong year for Valorem, with significant EBITDA growth and an increase in total closed capacity of 270MW, to 778MW. The short-term negative impact of the energy windfall tax introduced by the French Government was partially offset by increased auction tariffs. Longer term, market fundamentals remain strong given the ongoing issues with nuclear power plants in the country. The pipeline of wind and solar projects continues to grow as expected.
• Internationally, the construction of the Viiatti windfarm (313MW) is progressing to plan, with completion expected in 2024. The broader pipeline in Finland continues to mature well. In Greece, Valorem financed its first wind project during the period and is progressing well on further wind and solar opportunities.
• Beyond its core business, Valorem is exploring further growth initiatives in the floating off-shore wind segment, making progress on its first green hydrogen project and the development of a battery storage pipeline.

Regulatory information 
This transaction involved a recommendation of 3i Investments plc, advised by 3i France.