Greenlane Renewables (TSX:GRN) sent its second infusion of development capital to a company focused on converting landfill gas-to-renewable natural gas.
The company‘s deployment of pre-construction development capital is coming in the form of a convertible note agreement with funds being advanced on a milestone achievement basis of $0.7 million (USD$0.5 million).
The funds will be used to help development of the company’s landfill gas-to-renewable natural gas (RNG) project, and push it onto construction financing. The loan agreement terms give Greenlane the option to convert the note into equity interest in the development company as well as getting a return on capital.
“We are rapidly moving forward with our development capital program. This transaction marks our second deployment and supports an innovative developer targeting the landfill gas-to-RNG space in the United States. We continue to see abundant opportunities in different countries around the world to add incremental value to project developers by providing development capital to accelerate RNG projects to the ready for construction phase. Our aim is to help de-risk projects and build scale in RNG origination, while securing Greenlane system sales and services and new long-term recurring revenue for Greenlane as the industry continues to expand,” said Brad Douville, president and CEO of Greenlane.
Greenlane Renewables is a global provider of biogas upgrading systems devoted to cleaning up two of the largest sectors of the global energy system: the commercial transportation sector and the natural gas grid. The company takes organic waste sources like landfills, wastewater treatment plants, dairy farms and food waste streams, and converts them into clean, low-carbon and carbon negative renewable natural gas.
Greenland also offers three principle technologies: waterwash, pressure swing adsorption, and membrane separation. The company’s business relies on three decades of experience, patented and proprietary technology, over 135 biogas upgrading systems sold in 19 countries, and over 100 hydrogen sulfide treatment systems sold.
The original project planned by the development company is in the midwestern United States and is anticipated to generate over 250,000 metric million British thermal units (MMBTU) per year, using a Greenlane supplied biogas upgrading system. Revenue will come from the sale of physical gas and D3 renewable identification numbers under the US Renewable Fuel Standard program, or one of the many long-term offtake agreements the company has with natural gas utilities. The total capital expenditure for this venture to be provided by third parties is expected to be roughly $23 million (USD$18 million).
