Canadian biofuel developer closes financing

Montreal-based Enerkem said April 6 it had closed a new financing round of C$255mn (US$204mn), bringing in Spain’s Repsol and Monarch Alternative Capital as new investors.

Enerkem is developing new technology to produce circular chemicals and advanced biofuels from non-recyclable municipal solid waste. It has a demonstration facility operating in Edmonton and is building a commercial-scale plant in Varennes, Quebec.

As part of the new round, Repsol has invested C$170mn, C$75mn of which will be for Enerkem equity. With its equity investment, Repsol joins Canadian oil major Suncor as a strategic shareholder to accelerate deployment of Enerkem’s technology to new projects in Spain and Portugal.

“Repsol is a global multi-energy supplier that will greatly assist in accelerating the deployment of our technology in new markets,” Enerkem CEO Dominique Boies said. “Repsol’s equity investment in Enerkem strengthens our position as a leader in the renewable fuels and chemicals sectors and in building a circular economy.”

Repsol is already partnered with Enerkem to build a facility in Tarragona, Spain that will process 400,000 mt/yr of solid waste to produce nearly 240,000 mt/yr of methanol. Targeted for operations in 2026, the project was one of seven selected last year for financial support from the European Commission, with a confirmed grant of up to €106mn.

Monarch Alternative Capital is a new investor in Enerkem, and its C$30mn investment is a measure of its confidence in the Enerkem technology to have a “tangible” impact on greenhouse gas reductions.

“We believe Enerkem’s team and technology are uniquely positioned to provide a compelling, scalable solution to some of the worlds hardest to decarbonise sectors," managing principal Joseph Citarrella said.

Avenue Capital Group also participated in the latest financing round, reinvesting C$30mn, while other existing shareholders reinvested another C$25mn.