Waga Energy secures new loan to expand RNG facilities, including at US landfills

Dive Brief:

France-based Waga Energy has secured a 100 million euro loan from a consortium of five European banks: Groupe BPCE, Groupe Crédit Agricole, Arkéa Banque Entreprises & Institutionnels, BNP Paribas and Société Générale.
The company operates 27 facilities worldwide, including in France, Spain, Canada and the United States. Waga is looking to expand its portfolio of owned and operated facilities, especially in the U.S., said CFO Jean-Michel Thibaud.
The "green" syndicated loan, which can be extended for up to five years, must go to climate change mitigation technologies like Waga's. Thibaud said it will facilitate the financing for several projects over the life of the loan.

Dive Insight:

Waga Energy has been focused on developing RNG via landfill gas in North America, building on its expertise in Europe at a time when both domestic and foreign companies are looking to take advantage of credits in the U.S. market.

In March, Waga began operations at its first facility in the U.S., the Steuben County Landfill in New York. The county had previously operated a landfill-gas-to-energy facility, which was upgraded to produce 207,000 mmBtus of RNG to the grid annually. The project includes a 20-year landfill gas rights agreement with the county and a private offtake purchase agreement.

Thibaud said the completion of that facility is a milestone for the France-based company, which he said has nine more project agreements in the U.S. and 20 to 25 more projects in the pipeline.

"Being able to build credibility in the market ... was the key task, and now we were able to win and deliver the first project," Thibaud said.

Waga generates more than 3.5 million mmBtus of RNG at all its facilities, and has more than a dozen under construction today.

The company prefers financing, building and owning its own facilities. Thibaud said there are several benefits to that strategy, including protection of the intellectual property it uses for its Wagabox technology, which the company says is more efficient than other landifill-gas-to-RNG technologies on the market.

The company also collects data to improve its facilities and prefers to lock down what Thibaud described as "very predictable cash flows."

The new loan will help serve as a bridge to finance several more facilities, Thibaud said. He said it can be used for projects in Europe and North America, but the company's forward-looking plans are focused on the U.S., where an abundance of large landfills provide attractive opportunities to produce RNG. The company has already signed an agreement with Casella to build three Wagabox units and is partnering with OCI Global to produce RNG at a landfill in Beaumont, Texas, among other agreements.

"It is probably the biggest market for us," Thibaud said.

The company first began exploring opportunities in the country in 2019, according to Thibaud. As it began signing project agreements, it was able to secure additional financing from European investors, including a $60 million project financing deal for U.S. projects with Eiffel Investment Group earlier this year.

Looking ahead, Thibaud expects to bring more projects online this year and continue signing new agreements.

"Success today as we see it is very much tied to commercial success in the U.S.," Thibaud said. "The success will be [that] we have lots of Wagaboxes delivering cash flow to shareholders and we will help to fight climate change."