Xebec, Fonds Launch Renewable Natural Gas Investment Fund

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Xebec Adsorption Inc., a global provider of clean energy solutions, and Fonds de solidarité FTQ have created the GNR Québec Capital L.P. investment fund. 

With an initial capitalization of $20 million, this new investment vehicle aims to increase renewable natural gas (RNG) production in Québec. Partners, particularly from the agricultural and municipal sectors, will have access to the capital and expertise needed to develop and operate efficient facilities to treat organic waste. The creation of a fund of this type for RNG projects is a first in Québec.

Xebec and Fonds will each initially invest $10 million into the partnership. Over time, Xebec and Fonds expect that the partnership could receive an aggregate $100 million in equity capital from Xebec, Fonds and other investors. Xebec and Fonds’ initiative could, with a 75:25 debt to equity ratio, fund 12 to 15 RNG projects in Québec with an aggregate investment of $400 million over the next decade. The general partner, GNR Québec Capital Management Inc., overseen by a board of directors nominated by Xebec and Fonds, will be managing the partnership.

“We’re proud to once again partner with Xebec to increase Fonds’ impact in the fight against climate change. RNG can accelerate the decarbonization of sectors such as transportation, home heating and industry, by supporting the circular economy through organic waste responsive management activities,” says Dany Pelletier, vice president of investments at Fonds.

“This initiative also meets Fonds’ objectives for a just energy transition by creating jobs and supporting local economies with additional revenue streams for farmers, municipalities and industry. Xebec is excited to have them as a partner in this project for the large-scale rollout of RNG facilities in Québec,” he adds.

The partnership brings together industry participants (waste management companies, gas utilities, farmers, municipalities) and major financial institutions with a clear mandate to invest in organic waste treatment facilities for the production of RNG.

The market for RNG in Canada is still developing. Xebec and Fonds view this partnership as an essential step to develop and promote the expertise and efforts needed to accelerate the replacement of fossil fuels while supporting sustainable and responsible long-term investment in a waste-to-renewable gas economy in Canada.

The Canadian government recently released an updated timeline for the introduction of the Clean Fuels Standard (CFS). The objective of this standard is to achieve an annual reduction in greenhouse gas emissions of 30 million tons by 2030. It will do so by stimulating investment and innovation in low-carbon-intensity fuels while enabling cost-effective compliance. Xebec expects that the implementation of the CFS will create significant opportunities for the Canadian renewable gas industry over the next decade.

Photo: Xebec’s Renewable Gas Infrastructure web page

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