Overview

Future Biogas is one of the largest anaerobic digestion (AD) plant developers and biogas producers in the UK. It owns two AD plants with one further AD plant in construction, and operates 10 AD plants mainly on behalf of institutional investors under medium-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.

Recent developments

Future Biogas performed in line with expectations due to good services revenues and index-linked contracts. The company has a promising pipeline of organic growth and M&A opportunities.

During the year, Future Biogas signed a new 15-year gas supply agreement with AstraZeneca (‘AZ’) for unsubsidised green gas. To deliver this green gas, it is constructing the UK’s first unsubsidised AD plant. In September 2023, 3iN invested £35 million to fund the plant’s construction, which will supply 100GWh of biomethane to AZ’s UK sites.

In November 2023, 3iN invested a further £30 million to fund the acquisition of two AD plants that Future Biogas was already managing. These strategic investments continue to transition Future Biogas from a manager of third-party biogas plants to a leading developer, asset owner and operator. The company is actively exploring viable sites for constructing new AD plants, and the interest from high-quality corporate partners is encouraging.

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 UK’s leading generator of low carbon power from captured methane. The business captures methane gas from landfill sites and disused mines and converts it into electricity. Its sustainable energy expertise also includes solar power and battery energy storage technology. This work helps to reduce the impact of greenhouse gas emissions on climate change and provides secure, efficient local power generation.

Infinis’s cashflows are positively correlated with UK inflation through the Government-backed Renewables Obligations Certificate (ROC) and CfD regimes and through index-linked corporate PPAs. Infinis’ current generation portfolio comprises:

• Captured methane: 255 MW across 104 sites
• Solar: 103 MW across 4 sites
• Flexible generation: 173 MW across 29 sites

This unique combination of green baseload power, renewable assets and flexible generation mean Infinis is ideally placed to respond to growing electricity demand, increasing energy market volatility and to play a key role in the UK’s route to decarbonisation and greenhouse gas reduction.

Recent developments

Infinis had a strong financial performance despite lower UK power prices. It generated a value gain of £20 million as its captured landfill methane business outperformed expectations, compensating for lower margins from its power response assets. Furthermore, Infinis is making significant progress in developing its 1.4GW solar energy generation and battery storage pipeline, with 103MW of solar capacity already operational.

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