Deal round-up: Summer arrives early for bioenergy companies

3 Jun 2011

Solazyme’s initial public offering (IPO) alongside Cosan and Shell’s new joint venture marked the arrival of summer for the bioenergy sector in the opening week of June.

Renewable oil developer Solazyme surpassed expectations by raising over $227m in its IPO on Nasdaq, while Shell and Cosan’s Raízen for being in 2011 has hit the Brazilian market with an estimated capitalisation of £12bn. Another oil company to capitalise on the transition to greener resources this week was Canadian company Cenovus Energy, which acquired clean energy company Saltworks.

Waste-to-energy producer Enerkem also raised $60m in financing from existing backers and petrol company Valero Energy to pursue projects in the US, adding to a recent award from the US government.

Additional activity in the bioenergy space included the operating subsidiary of Four Rivers BioEnergy’s agreement to acquire waste oil procurement business ML Oils and cleantech company Carbon Friendly Solutions’ acquisition of a controlling stake in Polish biomass producer Carbiopel.

While Malaysia has now joined the US and Germany in making biodiesel blends compulsory at the pump, biodiesel company Diamond Green Diesel secured financing from its parent company petrol business Valero Energy, in its second deal this week, to construct a renewable diesel production facility in the US.

The week has also seen South Africa’s largest state-controlled power company Eskom secure a $365m loan from the African Development Bank that will go towards the development of a 100MW wind project and a similarly sized solar project in terms of capacity. A source from the power provider revealed to NewNet that it is still looking for additional investment to fuel its green energy growth plans. The Asian Development Bank, meanwhile, announced it is to commit $2bn each year to the clean energy sector from 2013 onwards.

Indian renewable energy developer Greenko Group has also had success raising finances, securing £50m through a placement as well as winning 650MW in wind concessions. The clean energy company also told NewNet it may seek future additional funds to support further developments.

Other renewable energy companies seeking to raise capital this week are Australia-listed Panax Geothermal, which is hoping to attract A$3.7m to progress its renewable energy projects, and cleantech business Vestaron, which is seeking up to $8m in equity backing according to filings with the Securities & Exchange Commission. Troubled power conversion group American Superconductor is also seeking a capital injection after allegations that it misrepresented financial results following order alterations from one of its main customers, wind turbine producer Sinovel.

Investors have meanwhile got their eyes on China New Energy, which saw its share price rise after listing on AIM last week.

Weeks on from the announcement that the US is axing its clean energy loan guarantee programme, its government has made another stream of funding available for renewable energy projects. It is making up to $12.5m available for investors through its Solar Energy Technologies Programme, which aims to boost rooftop photovoltaic projects in the country.

Another big development in the clean energy space was the approval of the absorption of Iberdrola Renovables’ renewables unit back into the parent group. Developer Terra-Gen’s Alta Wind Energy Center, which was recently the beneficiary of funding from search engine giant Google, also gained new backing this week in the form of a syndicated loan. Terra-Gen expects to bring two new wind projects online at the site later this year that will make the wind site the largest in the US at over 1GW. Energy storage solutions provider Primus Power is another US-based company to have raised $11m in venture capital this month to support the commercialisation of its technology.

Tags: biofuel, Shell, Solazyme