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EverGen acquires 50% interest in three Ontario RNG projects

EverGen Infrastructure Corp. has acquired a 50 per cent interest in Project Radius, three Ontario...

IMAGE: EverGen's Fraser Valley biogas facility

EverGen’s Fraser Valley biogas facility in B.C. (Courtesy EverGen Infrastructure Corp.)

EverGen Infrastructure Corp. has acquired a 50 per cent interest in Project Radius, three Ontario renewable natural gas (RNG) developments which will almost triple its production.

The other 50 per cent stake is owned by Toronto-based Northeast Renewables LP, which invests in a variety of energy infrastructure projects in Ontario.

Each of the three on-farm projects, all located within a 50-km radius, is expected to produce about 550,000 gigajoules per year — for a total of 1.7 million gigajoules annually — and will be constructed throughout 2023 and 2024.

“It really represents a new step for EverGen in that we’re achieving a scale that we didn’t really have prior to that,” said Mischa Zajtmann, EverGen’s president and COO. “We’re looking to take advantage of the ag-waste feedstock opportunities in Southern Ontario. The three projects essentially triple our production profile that we previously had here at EverGen.”

Founded in 2020, the Vancouver-based EverGen acquires, develops, builds, owns and operates a portfolio of RNG and related infrastructure projects across Canada in B.C., Alberta and Ontario.

EverGen (EVGN-X) will provide $1.5 million, half of the development fund, which will be provided from existing working capital and operating cash flow. It is expected to advance the projects to the notice-to-proceed (NTP) phase of development within the next six months.

Upon reaching the NTP phase, EverGen has the right to transition as exclusive operator of the project.

Project Radius

The project will use agricultural feedstocks like corn stover — the leaves, stocks and other leftovers from a field after harvest — as well as liquid dairy or swine manure, which will be obtained locally under long-term contracts. That feedstock is then transformed into biogas, which is then converted to natural gas and injected into existing infrastructure.

The three projects are located in Huron — Bruce, Oxford County, and the municipality of Stormont, Dundas and Glengarry.

The project is in late-stage negotiations for feedstock supply with multiple aggregators, as well as off-take agreements with utility-scale distribution companies. One such aggregator is the farmer-owned Ontario Bio-Mass Producers Co-operative Inc., which will supply corn stover to the project.

The agreement was based on a previous relationship with Northeast, which Zajtmann called “a really seasoned and experienced developer.”

All of Northeast’s projects are in Ontario. They include hydrogen, utility, liquified natural gas and power generation.

“We’re Canada’s largest privately owned RNG developer and operator. Our project base was established in B.C. and this Project Radius acquisition in Ontario really establishes us as the national renewable natural gas platform in Canada,” Zajtmann said. “For us it’s a stepping stone into Ontario. It opens the door for additional acquisition opportunities in the province, as well as beyond as we look at Quebec.”

In B.C., EverGen operates an anaerobic digestion facility in the Fraser Valley, a net-zero composting project in Abbotsford and another composting project in Pemberton. For these projects, EverGen has a 20-year offtake agreement with FortisBC, the province’s electricity and natural gas distribution utility. For Project Radius, a similar agreement would likely be reached.

RNG potential and EverGen expansion

EverGen first went public on the TSX Venture exchange in August 2021 with a $20-million IPO.

In March, EverGen signed a letter of intent with Coaldale, Alta.-based Grow the Energy Circle Ltd. to acquire a 67 per cent interest in a biogas facility in Alberta. It is in the first phase of development, and upon completion of its phase two expansion the plant is expected to produce 140,000 gigajoules of RNG annually.

During its recent 2022 first quarter earnings call, CEO Chase Edgelow called this “a stepping-stone project toward our regional expansion in a strategic jurisdiction and expected consolidation of the RNG industry in Canada.”

The company reported revenues of $1.4 million, just short of the $1.6 million reported in the same period for 2021. It also had a reported adjusted EBITDA of $0.6 million, which marked a 211 per cent increase from $0.2 million during Q1 2021.

While Zajtmann believes it’s only a matter of time before EverGen expands into the U.S., for now the company is focused in Canada.

“We see RNG as being similar to, or akin to, what the wind and solar space looked like 10 years ago. There was a lot of developers out there looking for a player with access to capital to come in and play,  consolidate the industry and bring down costs,” Zajtmann said. “Everyone’s really looking to come in and fulfill that and we think this Project Radius acquisition is a step in that direction.”

EDITOR’S NOTE: Some information in the original version of this article had been attributed to the wrong EverGen executive. The article has been updated to fix the attribution. SustainableBiz apologizes for the error.

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