Gevo’s Green Bond Financing for Iowa RNG Project

Milbank LLP advised Gevo, Inc. on the deal.

Gevo, Inc. (NASDAQ: GEVO) (“Gevo”) announced a  $68,155,000 green bond offering to finance the construction of Gevo’s renewable natural gas (“RNG”) project in Northwest Iowa and with an associated letter of credit facility for Gevo with Citibank, N.A. The tax-exempt bonds were issued by the Iowa Finance Authority on April 15, 2021.

When fully operational, the RNG facility is expected to generate approximately 355,000 MMBtu of RNG per year by digesting dairy cow manure, a renewable resource. Anaerobic digestion of dairy manure by the project will help reduce emissions of methane emitted from existing manure lagoons and avoid emissions of CO2 diverted from land application.

The bonds plus equity investments by Gevo will fund the construction of the biogas facility, comprised of the anaerobic digesters at dairy farms, biogas gathering pipelines, and a centrally located system that will upgrade the biogas to pipeline quality natural gas and interconnect to an existing interstate pipeline. Construction is expected to begin shortly and start-up is expected in early 2022. RNG sale revenues are expected to benefit from California’s Low Carbon Fuel Standard (LCFS) program and the U.S. Environmental Protection Agency’s Renewable Identification Number (RIN) program. Some RNG may be used by Gevo as process energy in its planned Net-Zero 1 Project to produce liquid hydrocarbons in the form of renewable jet fuel and renewable gasoline or in Gevo’s other future projects. The feedstock for the RNG project will be supplied by dairy farms located in Northwest Iowa totaling over 20,000 milking cows.

The Milbank team for the green bond financing was co-led by Allan Marks (Picture) and Global Capital Markets partner James Ball, along with Global Project, Energy and Infrastructure Finance associates Anya Andreeva, Javad Asghari, Sharaf Islam, Lucy Stanley and Laura Verlangieri and Capital Markets special counsel Teresa Chen with associates Jasmine Khaneja and Janelle Vacchiano.

 

Involved fees earner: Anya Andreeva – Milbank; Javad Asghari – Milbank; James Ball – Milbank; Teresa Chen – Milbank; Sharaf Islam – Milbank; Allan Marks – Milbank; Lucy Stanley – Milbank; Janelle Vacchiano – Milbank; Laura Verlangieri – Milbank;

Law Firms: Milbank;

Clients: Gevo, Inc.;

Martina Bellini

Author: Martina Bellini