CVW Sustainable Royalties Inc. (CVW-X) is supercharging its dual-track strategy of investing in cleantech businesses and its own solution to clean up oilsands tailings with an expected $100 million in financing.

Formerly named CVW CleanTech, the Calgary company announced last week it plans to receive a $50-million investment from Toronto-based Fairfax Financial Holdings Limited. Also, a brokered private placement led by another Toronto-based company, Stifel Nicolaus Canada Inc., was upsized from $25 million to $50 million.

“Our goal is to, one, obviously have our oilsands technology commercialized. I think that will be our best royalty within the portfolio once it’s up and running,” CVW’s CEO Akshay Dubey said in an interview with Sustainable Biz Canada. 

“At the same time, we think there’s tons of opportunities to go and invest with other smart technology developers.”

CVW’s investing strategy

With the rebranding, CVW added a diversified cleantech royalty platform in which it invests in other cleantech firms and is paid a percentage of the topline revenue. 

The company’s board and management saw a singular focus on one technology as a risk, Dubey explained. As a result, the royalties platform was launched once its oilsands remediation technology was sufficiently developed and the company secured the partnerships and early financing.

CVW is most interested in companies that “help produce the materials the world needs, but in a more sustainable manner,” Dubey said, such as metals, low-carbon fuels and agricultural technology.

To date, CVW has completed two royalty transactions:

• A $14-million investment in Calgary-based Northstar Clean Technologies Inc., which is developing facilities to recycle asphalt shingles.
• A $4-million investment in Relocalize Inc., a Montreal-based firm developing microfactories that produce packaged ice in the distribution centres of grocery stores to shorten supply chains.

With the latest capital raise, CVW plans to make more investments over the next 12 to 18 months to further diversify its portfolio. The biofuels and renewable natural gas industries are “especially interesting,” Dubey said. Metals recycling is “a key area of focus” to the company, he added, as is petrochemical recycling.

“It’s really finding things where we think the underlying technology has very strong fundamentals and has an attractive end-market, has support from customers and suppliers,” Dubey said about CVW’s royalties strategy. 

Most of the company’s royalties pipeline valued at over $900 million is in North America, Europe and Australia, he disclosed. 

Oilsands tech continues to be developed

While its royalties platform takes shape, CVW remains focused on deploying its oilsands technology. After bitumen is processed, it leads to a byproduct called froth treatment tailings which are typically disposed in tailings ponds. Rather than let the tailings pollute the local environment and emit greenhouse gas emissions, CVW developed a technology to remediate it in a nearby treatment facility.

It recovers hydrocarbons, critical minerals (zirconium, titanium) and water before the tailings are discharged into ponds. This process also removes the hydrocarbons, which would otherwise linger in the ponds and release into the atmosphere as greenhouse gas emissions.

The company is engaged with key stakeholders such as the federal and Alberta governments and Indigenous partners, and is participating in discussions around environmental regulations and economic incentives, Dubey said. Those conversations will need to be finalized before the company is ready to close commitments for a commercial-scale project, he said.

For an operation of that size, the expectation is to process thousands of tonnes of tailings per hour. CVW’s technology has been independently tested to show it can minimize fugitive methane emissions from tailings ponds by 90 per cent, Dubey said.

If CVW’s technology was used on six oilsands sites in Alberta, it would mean eliminating up to four per cent of Canada’s methane emissions, he added, taking on a powerful greenhouse gas.

Green gains for the environment and economy

Dubey said investing in sustainable businesses remains compelling, as shown by the funding it has received. CVW’s royalty model, which is also used in the oil and gas, mining and pharmaceuticals sectors, has been highly attractive to the company's investors, he added.

That said, the cleantech industry is facing a “rationalization of expectations,” according to Dubey. Elevated interest rates are challenging many startups with interesting technologies but not enough of an economic underpinning. It is a problem CVW is aiming to avoid with its royalties investments by focusing on companies with strong business cases.

“Folks are still very much interested in these types of businesses, but they want to see these businesses generate shareholder value at the same time.”