ReNu Energy (ASX: RNE) has agreed to sell a 70% stake in its current and future bioenergy assets to international infrastructure investment vehicle Resonance Industrial Water Infrastructure Fund – with the total deal worth up to A$100 million.
Resonance Asset Management signed the deal with ReNu energy on behalf of its infrastructure investment vehicle.
The initial transaction paves the way for Resonance Industrial Water to invest 70% in ReNu’s existing bioenergy assets for about A$6 million. Resonance Industrial Water will also contribute 70% of the funding required for the proposed AJ Bush bioenergy G4 expansion project.
Additionally, Resonance Industrial Water also has first right of refusal to secure a 70% interest in any new project ReNu initiates.
This would give Resonance Industrial Water up to A$100 million worth of ReNu’s current and future bioenergy portfolio.
As part of the agreement, ReNu will retain a 30% holding in its current and future bioenergy assets developed with Resonance Industrial Water.
ReNu will also provide construction, asset management, operation and maintenance services to the joint projects.
“This proposed investment by Resonance Industrial Water in our existing bioenergy assets and their ongoing commitment to significantly grow the portfolio with us is an outstanding result for ReNu,” ReNu chief executive officer Craig Ricato said.
“The installed capacity of bioenergy facilities in Australia and New Zealand trails that of Europe and the US, and we believe that there is opportunity for over 100 new bioenergy projects in Australia, alone, using these established technologies,” Mr Ricato noted.
He added having financial backing from Resonance Industrial Water would enable ReNu to “more vigorously” pursue these project opportunities.
The bioenergy projects aim to provide clean, affordable energy to agricultural and food processing industries.
ReNu has two operational bioenergy projects including Goulburn, which is at the Southern Meats abattoir, and AJ Bush, which is at a rending plant.
Mr Ricato said Resonance Industrial Water’s financial backing would result in a “more resilient” business and enable the company to continue investing in renewable energy projects, while developing and operating bioenergy assets.
The news sparked the ReNu’s share price to soar 20% to reach A$0.018 by mid-morning trade before dipping to A$0.017 at mid-day.