FemoGas will use the funds to refinance and build liquid agricultural biomethane plants aimed at helping decarbonise Europe’s road and maritime transport sectors.
Paris-based sustainable infrastructure investor Infranity, a Paris-based has provided Italian biomethane producer FemoGas with a €245m loan to refinance and build seven liquid biomethane plants. Three production facilities are currently already operational.
Biomathane is a renewable gas derived from organic matter like manure or silage from farms. The French infrastructure investor is the sole lender on the deal, which is its first investment in the biogas sector.
The biomethane generated from the facilities backed by the financing deal will be commercially available to serve the European road and maritime transport sectors.
FemoGas is targeting annual production of 1.5 Terawatt hours (TWh) of biomethane by 2030. The injection of 1.5 TWh of biomethane into the Italian gas network could reduce CO2 emissions by heavy duty vehicles serving Italian farms by one million tonnes a year. That’s equivalent to around 2.5% of the total emissions generated by the Italian agricultural sector, according to FemoGas.
“This is a strategic step in broadening our engagement in the energy transition and we are confident that this partnership will drive substantial growth and contribute to a more sustainable future. This transaction underscores Infranity’s capability to execute bilateral agreements and our strong presence in the mid-cap market,” said Garbine Unda, investment director at Infranity.
The European Commission has set an annual production target of 35 billion cubic metres (bcm) of biomethane production by 2030 as it tries to reduce its dependence on Russian natural gas, according to the European Biogas Association. Europe currently produces 3bcm of biomethane.
Doubling production
The loan from Infranity will allow FemoGas to double its production of liquid biomethane for heavy duty vehicles and maritime transport, which are challenging to electrify, to 0.5 TWh by 2027, according to its co-CEO, Stefano Svegliado.
“This initiative will play a key role in supporting Italian agriculture and livestock farming—pillars of the Made in Italy agri-food sector. At the same time, the group will accelerate the production of chemical and organic fertilisers not derived from hydrocarbons,” said Stefano Bozzetto, founder and co-CEO of FemoGas.
Infranity, which manages around €12.5bn in assets, focuses on five main fields of infrastructure across all of its strategies. These include energy transition, green mobility, the environment, social infrastructure and digital transformation.
As reported by Impact Investor, last month Infranity announced a €200m investment in German renewable energy company Blue Elephant Energy to help support the development and construction of one gigawatt of renewable energy capacity across Europe. Last year, Infranity announced it had raised more than €1.5bn for a Europe-focused debt strategy.
