Gevo’s RNG Project Achieves Financial Closing
April 15 2021 - 4:01PM
Gevo, Inc. (NASDAQ: GEVO), announced today that it has closed a
$68,155,000 “Green Bond” private activity bonds offering (the
“Green Bond Offering”) to finance the construction of its renewable
natural gas (“RNG”) project in Northwest Iowa (the “RNG Project”).
The RNG Project will generate RNG captured from dairy cow manure
(the “Feedstock”).
The Feedstock for the RNG Project will be supplied by three
dairy farms located in Northwest Iowa totaling over 20,000 milking
cows. When fully operational, the RNG Project is expected to
generate approximately 355,000 MMBtu of RNG per year. Gevo is
working with a major RNG dispenser to finalize an agreement to sell
the RNG into the California market. RNG sale revenues are expected
to benefit from California’s Low Carbon Fuel Standard (“LCFS”)
program and the U.S. Environmental Protection Agency’s Renewable
Identification Number (“RIN”) program. Some RNG may be used by Gevo
as process energy in its Net-Zero 1 Project or Gevo’s other future
Net-Zero projects.
Gevo fully funded the RNG Project’s development costs and 100%
of its equity capital from cash reserves. Gevo received
approximately $9.3 million in reimbursement for development, long
lead equipment, and financing costs incurred during the development
period upon closing of the Green Bond Offering. Construction of the
RNG Project is expected to begin by the end of April 2021 and start
up is expected in early 2022. Gevo will submit an LCFS pathway
application to the California Air Resources Board and expects to
realize full cash flows from LCFS credits and RINs in the second
half of 2022. The RNG Project is then expected to generate cash for
Gevo of approximately $9 to $16 million per year (including the
LCFS credits and RINs).
“The RNG Project is expected to serve as an important component
of Gevo’s Net-Zero strategy, and I want to thank President and
Chief Operating Officer Chris Ryan and his team for their hard work
and commitment that allowed us to accomplish this goal, and to
Chief Financial Officer Lynn Smull and his team, and to Citigroup,
for getting the debt deal done. We have a good team that has shown
they can develop and finance RNG projects. We expect to use these
capabilities going forward to develop additional RNG projects,”
said Patrick R. Gruber, Chief Executive Officer of Gevo. “We are
also pleased that our dairy partners will reap benefits from the
RNG Project given that the manure digesters should improve the
farms’ sustainability and lay the groundwork for more efficient
recycling of nutrients and better soil health.”
The proceeds of the Green Bond Offering, combined with Gevo
equity, will be used to finance (1) the construction of the RNG
Project which is comprised of (A) three anaerobic digesters and
related equipment situated on dairy farms located Northwest Iowa
that will produce partially conditioned raw biogas from cow manure,
(B) gathering pipelines to transport biogas to a centrally located
gas upgrade system, (C) a centrally located gas upgrade system
located in Doon, Iowa that will upgrade biogas to pipeline quality
RNG and interconnect to Northern Natural Gas’ interstate pipeline,
and (D) other related improvements; (2) to capitalize a portion of
the interest due on the bonds during the construction period; and
(3) to pay a portion of the costs of issuing the bonds.
For more information and details about the Green Bond Offering,
please see the Current Report on Form 8-K that Gevo filed with the
U.S. Securities and Exchange Commission on April 15, 2021.
About Gevo
Gevo’s mission is to transform renewable energy and carbon into
energy-dense liquid hydrocarbons. These liquid hydrocarbons can be
used for drop-in transportation fuels such as gasoline, jet fuel
and diesel fuel, that when burned have potential to yield net-zero
greenhouse gas emissions when measured across the full life cycle
of the products. Gevo uses low-carbon renewable resource-based
carbohydrates as raw materials, and is in an advanced state of
developing renewable electricity and renewable natural gas for use
in production processes, resulting in low-carbon fuels with
substantially reduced carbon intensity (the level of greenhouse gas
emissions compared to standard petroleum fossil-based fuels across
their life cycle). Gevo’s products perform as well or better than
traditional fossil-based fuels in infrastructure and engines, but
with substantially reduced greenhouse gas emissions. In addition to
addressing the problems of fuels, Gevo’s technology also enables
certain plastics, such as polyester, to be made with more
sustainable ingredients. Gevo’s ability to penetrate the growing
low-carbon fuels market depends on the price of oil and the value
of abating carbon emissions that would otherwise increase
greenhouse gas emissions. Gevo believes that its proven, patented
technology enabling the use of a variety of low-carbon sustainable
feedstocks to produce price-competitive low-carbon products such as
gasoline components, jet fuel and diesel fuel yields the potential
to generate project and corporate returns that justify the
build-out of a multi-billion-dollar business.
Gevo believes that the Argonne National Laboratory GREET model
is the best available standard of scientific-based measurement for
life cycle inventory or LCI.
Learn more at Gevo’s website: www.gevo.com
Forward-Looking Statements
Certain statements in this press release may constitute
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements relate to a variety of matters including, without
limitation, the development and construction of the RNG Project,
the ability of Gevo to realize production of RNG by the RNG
Project, Gevo’s ability to generate cash from the RNG Project, and
other statements that are not purely statements of historical fact.
These forward-looking statements are made on the basis of the
current beliefs, expectations and assumptions of the management of
Gevo and are subject to significant risks and uncertainty.
Investors are cautioned not to place undue reliance on any such
forward-looking statements. All such forward-looking statements
speak only as of the date they are made, and Gevo undertakes no
obligation to update or revise these statements, whether as a
result of new information, future events or otherwise. Although
Gevo believes that the expectations reflected in these
forward-looking statements are reasonable, these statements involve
many risks and uncertainties that may cause actual results to
differ materially from what may be expressed or implied in these
forward-looking statements. For a further discussion of risks and
uncertainties that could cause actual results to differ from those
expressed in these forward-looking statements, as well as risks
relating to the business of Gevo in general, see the risk
disclosures in the Annual Report on Form 10-K of Gevo for the year
ended December 31, 2020, and in subsequent reports on Forms 10-Q
and 8-K and other filings made with the U.S. Securities and
Exchange Commission by Gevo.
Investor and Media Contact+1
720-647-9605IR@gevo.com
Gevo (NASDAQ:GEVO)
Historical Stock Chart
From Mar 2024 to Apr 2024
Gevo (NASDAQ:GEVO)
Historical Stock Chart
From Apr 2023 to Apr 2024