VARO Energy has successfully placed a $165 million green loan, marking an important milestone in the development of its biogas business. The loan will partly refinance VARO's acquisition of the Bio Energy Coevorden biogas manufacturing facility. The loan was independently assessed and verified by ISS ICS, confirming its compliance with the Loan Market Association's Green Loan Principles and alignment with the UN's Sustainable Development Goals. VARO plans to more than double the manufacturing capacity of BEC to 650 GWh of biogas by 2026 and has a material trading capacity of 1TWh of biogas and green certificates per year.
Zug, Switzerland – VARO Energy (“VARO”) today announces the successful placement of a $165 million green loan, the first in the company’s history. The green loan, part of a wider $3.33 billion financing announced separately today, will partly refinance VARO’s acquisition of the Bio Energy Coevorden (“BEC”) biogas manufacturing facility.
The green loan represents an important milestone in the development of VARO Energy’s biogas business, one of the company’s five strategic growth pillars under its ONE VARO Transformation strategy. Since launching the strategy in July 2022, VARO has built a material business in biogas, acquiring BEC – the largest biogas manufacturing facility in Northern Europe – and Renewables Energy Services (“RES”), the leading trader of biogas and green credits.
VARO is now scaling its biogas business and is set to more than double the manufacturing capacity of BEC to 650 GWh of biogas by 2026. In addition, the company has a material trading capacity of 1TWh of biogas and green certificates a year.
The green loan was independently assessed and verified by ISS ICS. The report found that VARO defined a formal concept for its green loan in terms of use and management of proceeds and reporting which is compliant with the Loan Market Association’s Green Loan Principles. Further, the report stated that the use of proceeds from the green loan was in line with the UN’s Sustainable Development Goals 7 (provision of affordable and clean energy) and 13 (providing climate action). Finally, the report identified that VARO’s sustainability objectives and rationale for issuing the green loan has been clearly described and aligns with the sustainability strategy of the issuer.
Commenting on the announcement Dev Sanyal, CEO of VARO, said:
“In July 2022 we announced our plan to build Biogas as one of our five strategic growth pillars. Since then, we have successfully acquired BEC, Northern Europe’s largest biogas manufacturing facility, and RES, a major trader of biogas. Today, as part of building out the Biogas business, we have secured a certified $165 million green loan, meeting stringent ESG criteria set out by the Loan Market Association’s Green Loan Principles. It also represents an important signal from the financial markets which recognizes the progress we have made in delivering against our ONE VARO Transformation strategy to become a net zero company by 2040.”
ING Bank N.V. acted as the Sustainability Coordinator for the Green Term Loan Tranche.
About VARO
VARO Energy (“VARO”) is the partner of choice for customers in the energy transition by providing sustainable and reliable energy solutions. Engine 1 includes conventional energies manufacturing, storage, distribution, marketing, and trading. Engine 2 activities are focused on sustainable energies and include biofuels, biomethane and bio-LNG, green hydrogen, e-mobility, and nature-based carbon removals. VARO plans to invest around $3.5 billion over the 2022-26 period, with two-third committed to sustainable energies. The company has a net zero target for scope 1, 2 and 3 by 2040. VARO is a Swiss-based private company, whose main shareholders are Carlyle International Energy Partners and Vitol.