VARO's First Green Loan Boosts Biogas Growth
VARO Energy has reached a significant milestone by successfully securing a $165 million green loan, marking the company's first-ever venture into sustainable financing.
This green loan is part of a broader $3.33 billion financing initiative, which will play a key role in partially refinancing the acquisition of the Bio Energy Coevorden (BEC) biogas manufacturing facility.
This achievement represents a major stride in VARO Energy's biogas business development, a crucial aspect of the company's strategic growth plan known as the ONE VARO Transformation strategy.
Launched in July 2022, this strategy focuses on five key growth pillars, including biogas. In line with this vision, VARO has made significant strides in the biogas sector, acquiring BEC, the largest biogas manufacturing facility in Northern Europe, as well as Renewables Energy Services (RES), a leading biogas and green credits trader.
Looking ahead, VARO is now gearing up to expand its biogas operations by more than doubling the manufacturing capacity of BEC to 650 GWh of biogas by 2026. Additionally, the company boasts an impressive trading capacity of 1TWh of biogas and green certificates annually.
The green loan has undergone thorough independent evaluation and verification by ISS ICS. The assessment found that VARO has established a clear framework for the green loan's utilisation, management of funds, and reporting, adhering to the Loan Market Association's Green Loan Principles.
Moreover, the use of the loan's proceeds aligns perfectly with the UN's Sustainable Development Goals 7 (ensuring affordable and clean energy) and 13 (advancing climate action). The report further highlighted that VARO's sustainability objectives and the rationale behind issuing the green loan were explicitly stated and in harmony with the issuer's overall sustainability strategy.
Dev Sanyal, the CEO of VARO, expressed his delight at the announcement, emphasising the company's commitment to biogas as one of its strategic growth pillars. Since its introduction, VARO has successfully acquired BEC, the largest biogas manufacturing facility in Northern Europe, and RES, a prominent biogas trader.
The green loan's certification, following the rigorous standards set by the Loan Market Association's Green Loan Principles, serves as both an endorsement of VARO's progress in implementing its ONE VARO Transformation strategy and a validation of its dedication to achieving carbon neutrality by 2040.
The green loan initiative had ING Bank N.V. serving as the Sustainability Coordinator for the Green Term Loan Tranche, further underscoring the financial industry's recognition and support of VARO's commitment to sustainability.
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Source: VARO Energy
