The Sweet Smell of Trash: EverGen Infrastructure Corp. (TSX.V: EVGN) (OTCQB: EVGIF) Growing Profits and a Dominant Position in Canada’s Renewable Natural Gas Market

  • Through three acquisitions, EverGen Infrastructure Corp. has rapidly emerged as a leading player in the RNG market with its specialization in waste-to-energy
  • EverGen owns the first producing RNG facility in Western Canada and calls municipalities and FortisBC as customers
  • EverGen recently signed an LOI to expand into Alberta through the acquisition of 67% of a RNG project that has already been contracted to supply RNG to FortisBC

To many, a waist-deep heap of rotting food and agricultural waste is just garbage, but to Chase Edgelow, Chief Executive Officer of EverGen Infrastructure (TSX.V: EVGN) (OTCQB: EVGIF), it is a valuable resource and opportunity to generate profits while doing something good for the planet. Less than two years from inception, EverGen, which brands itself as Canada’s Renewable Natural Gas (“RNG”) Infrastructure Platform, has established itself as a pioneer in the RNG market, snapping up several facilities in the process, including penning an LOI for a controlling stake in in a biogas facility in Alberta in March.

RNG, a term used to describe biogas upgraded as a substitute for fossil natural gas, is critical to a clean energy future. Produced from any number of feedstocks, including municipal solid waste, livestock, food, and material from digesters at wastewater treatment plants, RNG can be used in many applications, including heating and cooling, electricity generation, and fuel for many different types of vehicles, amongst other things. This, in turn, saves not only on natural resources, but eliminates all the pollution from the extraction and downstream processes. Moreover, using the organic waste as feedstock can have a meaningful impact on the reduction of ozone-damaging methane emissions created through other disposal methods.

Infinity Business Insights sees a thriving global RNG market undergoing 42.1% compound annual growth that will take it from $5.3 billion in 2021 to $62.1 billion by 2028. It is with good reason that Canadian companies including Enbridge Inc., ATCO Energy Solutions, and FortisBC have initiatives ongoing in the space. FortisBC’s has a stated target to have at least 15% of its gas supply carbon neutral by 2030.

Headquartered in Vancouver, British Columbia and incorporated in May 2020, EverGen has quickly made a name for itself in its mission to own and operate a portfolio of RNG, waste-to-energy, and related infrastructure projects throughout North America.  With an initial focus in Western Canada, the company operates three facilities through its wholly owned B.C.-based subsidiaries: Net Zero Waste Abbotsford Inc. (“NZWA”), Sea to Sky Soils and Composting Inc. (“SSS”) and Fraser Valley Biogas Ltd. (“FVB”). All three companies were acquired by EverGen in a four-month span from December 2020 to April 2021.

FVB has the distinction of being the first producing RNG project in Western Canada from its facility in Abbotsford. It also was the first project to produce RNG into FortisBC’s network. The facility combines anaerobic digestion and biogas upgrading to produce RNG, primarily by converting agricultural waste from local dairy farms.

EverGen also generates revenue (in fact, historically most of its revenue) through processing inbound organics, yard waste and biosolids into high-quality organic compost under long-term contracts with municipalities. However, the trend towards RNG is accelerating as the push for a circular energy economy gains momentum. In its favor, EverGen has some powerful relationships and customers in municipalities and FortisBC, an electricity and natural gas distribution utility serving approximately 1.2 million British Columbians.

In addition to the FVB/FortisBC agreement, the relationship was deepened last April when FortisBC and NZWA agreed to a 20-year offtake agreement. Per the agreement, which was approved by the British Columbia Utilities Commission in October, FortisBC will purchase up to 173,000 gigajoules of RNG annually from NZWA for injection into its natural gas system. The project is expected to convert municipal and commercial organic waste into enough energy to meet the needs of approximately 1,900 residential homes.

From this existing platform, EverGen plans to further develop RNG facilities to provide offtake to FortisBC and other creditworthy buyers under long term contracts. With the regulatory path now clear and development and construction ongoing, NZWA expects to be supplying FortisBC with its RNG by early 2023.

EverGen, which completed its initial public offering that raised CDN$20.0 million in August, generated CDN$1.94 million in revenue during the third quarter, bringing the total for the first nine months of 2021 to CDN$6.87 million.

In March, EverGen took its first step to expand the next province over, executing a letter of intent with Grow the Energy Circle Ltd (“GrowTEC,” the general partner of CKPPQ Farms LP), to acquire a 67% interest in a biogas facility in Alberta. The LOI also stipulates that the two companies will collaborate on developing and expanding the renewable gas output at such facility, a “cornerstone” project allowing EverGen to continue participating in the consolidation and growth of the RNG industry.

EverGen has agreed to pay CDN$6.6 million for the controlling interest though CDN$3.3 million in cash and the balance through issuance of 600,000 shares of common stock at a deemed value of CDN$5.50 per share, a 19.8% premium to the price of the stock the day before the LOI was executed. 

GrowTEC, located on the Perry Family farm near Lethbridge, Alberta, is a multi- faceted bioenergy venture of sustainable agriculture, integrating responsible best practices and renewable energy. The acquisition dovetails perfectly with EverGen’s growth agenda, as GrowTEC is developing a project that include a farm-scale anaerobic digester that converts biodegradable waste into biogas, subsequently upgrading it to RNG.

FortisBC is again in the mix, with the utility committed to buying RNG produced at the farm under an offtake agreement.

The project is currently in Phase 1, which is expected to be producing 80,000 gigajoules of RNG per annum starting in Q3 2022. Upon the EverGen investment, the two parties will work to increase production to 140,000 gigajoules of RNG annually.

“We are thrilled to be partnering with GrowTEC and working with the Perry Family Farm on EverGen’s first project in the Alberta market,” said Edgelow in a press release on the LOI. “As we expand our RNG infrastructure platform, we are focused on investing in truly sustainable operations that contribute to carbon-negative energy production and positively impact climate change initiatives,” he added.

EverGen shareholders will be on the lookout for the completion of the transaction, which is expected to happen before summer arrives.

For more information, visit the company’s website at www.EvergenInfra.com.

NOTE TO INVESTORS: The latest news and updates relating to EVGIF are available in the company’s newsroom at https://ibn.fm/EVGIF

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