Schmack Biogas and HgCapital in €130 million deal on biogas plants
The world's largest biogas plant manufacturer Schmack Biogas AG and HgCapital, a leading private equity investor in Europe's renewables sector, have signed a €130 ($189) million framework agreement that will run until 2010. Under the agreement, Schmack Biogas will build 12 to 15 biogas plants with a combined capacity of approximately 30 MW. Biogas is seen by HgCapital as a sector with a huge growth potential, especially because the efficient biofuel can be fed into existing natural gas pipeline networks and because it accomodates a broad diversity of biomass feedstocks.
The bulk of the plant construction volume is expected to be ordered in 2008 and 2009. The framework agreement also covers the development of the respective project sites. Schmack Biogas AG assumes that the site development services provided will be reflected in 2007 and 2008 sales and earnings.
Ulrich Schmack, CEO of Schmack Biogas AG, says HgCapital is an experienced investor in renewable energies and already has extensive experience with biogas technology. Against this background, the strategic partnership is seen as all the more valuable. Schmack Biogas is particularly pleased that Regensburg based Aufwind Schmack - also involved in wind and geothermal projects - will be in charge of the commercial management of the projects, as the company has already worked successfully with HgCapital in the past.
We believe that biogas is the most technically efficient and economically attractive segment of the bioenergy industry and that the feeding-in of biogas into the natural gas grid is a market with huge potential. [...] In Schmack Biogas we have found a partner that combines mature technology with a compelling and innovative feedstock and service concept. - Emma Tinker, Director at HgCapitalThrough Aufwind Schmack HgCapital has already invested in a number of biogas plants in Germany that use Schmack Biogas’s technologies (see animation):
energy :: sustainability :: biomass :: bioenergy :: biofuels :: natural gas :: microbiology :: anaerobic digestion :: biogas :: biomethane :: biotechnology :: Germany ::
HgCapital makes long-term equity investments in Western European renewable energy projects and development companies. It covers a broad spectrum of renewable energy technologies and focuses on projects and companies with total investment volumes of €20-€500 million. It is also active as a buyout investor with a focus on investments in businesses with enterprise values ranging between €75 and €750 million.
HgCapital's business model combines sector specialisation with pro-active company support as well as the corresponding management expertise across each phase of the investment process. HgCapital manages more than €2.7 billion for some of the world’s leading institutional and private investors. Its goal is to achieve outstanding results for our investors, management teams and intermediaries. on HgCapital please visit .
Schmack Biogas AG is a leading German supplier of advanced biogas plants. Established in 1995, the company provides its services through two divisions, namely Planning and Construction and Plant Management and Service, and is one of the few full-service providers in the industry. Apart from technical support, the company focuses on comprehensive microbiological service.
Through its subsidiary, Schmack Energie Holding the company now also operates its own plants and markets the biogas produced as well as the electricity and heat generated – mainly together with joint venture partners. To date, Schmack Biogas has built 204 plants with a combined nominal output of approx. 61 MW.
In Europe, biogas is being developed on a large scale for the production of fuels for stationary power generation (to be used in natural gas plants, in cogeneration units or in fuel cells), as well as for the transport sector (earlier post and here). It is being fed into the natural gas grid on an increasingly large scale (previous post and especially here) or in dedicated pipelines supplying cities, while some are creating real biorefineries around it that deliver green specialty chemicals, fuels and power (earlier post). The green gas can be made by the anaerobic fermentation of biomass, either obtained from dedicated energy crops (such as specially bred grass species, biogas maize or sugarcane), or from industrial, municipal or agricultural waste-streams.
Of all biofuels, biogas delivers most energy per hectare of crops. It is also the least carbon intensive production path, with some biogas pathways actually delivering carbon-negative bioenergy (earlier post and here). Importantly, biogas can be integrated in carbon capture and storage systems (CCS), in a way that presents advantages over other CCS pathways (earlier post).
According to a recent assessment of the sector, the world market for biogas currently has a value of around €2 billion, expected to grow to €25 billion by 2020 (previous post). But the competition is growing, worldwide. Some projections show biogas may replace all of Europe's natural gas imports from Russia by 2020 and yield up to 500 billion cubic meters per year (earlier post).
Animation: integrated biogas technologies developed by Schmack Biogas. Credit: Schmack Biogas AG.
References:
Schmack Biogas AG: Schmack Biogas signs framework agreement with HgCapital - Order volume of approx. EUR 130 million until 2010 - December 20, 2007.
Biopact: Market study tracks global boom in biogas, Germany technology leader - July 13, 2007
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