Each production plant company will be co-owned by Scandinavian Biogas (85%) and German Biogas i Sverige AB (15%). Closing will take place once each company is registered, and all other conditional agreements are met, which is expected to take place no later than May 31, 2023.
"Initially, we focus on these two projects, and estimate that the final investment decisions will be made in 2024 when among other things environmental permits are granted. The total investment is estimated at approx. 90 million Euro and the operating EBITDA margin is estimated to significantly exceed 30%, which is in line with the group’s goals," Scandinavian Biogas said in a press relese.
The group’s ambition is to build a strong pipeline of potential biomethane plant projects in Northern Europe. The German market is prioritized given its size, well-developed gas infrastructure and pro-biogas attitude.
Production is mainly based on manure and other organic waste from agriculture. The plan is to inject the biogas into the German gas network. Some or all the production may be liquefied. The rot remains are post-processed into bio-fertilizer which is returned to nearby farms completing the cycle.
“Entering the vast German market is a strategic milestone and an important addition towards our production targets in 2026 and 2030. The very attractive German biogas market is in a transition process from electricity production to biomethane production, and we aim to be an important player in that transition,” says Matti Vikkula President and CEO, Scandinavian Biogas.
The next step involves preparing for final investment decisions, which includes among other things, securing land and environmental permits, specifications, choosing technology partners and cater for each facility to be financed. Investment decisions are expected to be made within 12 and 20 months respectively. Commissioning typically takes place within 14-18 months from the investment decision.
“Through this collaboration, we get a partner to support us in our development of the German market. It feels very good to start the partnership with two established projects and options for further future biogas projects,” says Michael Wallis Olausson, Head of Growth, at Scandinavian Biogas.
Scandinavian Biogas strategic goal is to reach a production capacity of 1.2 TWh of biomethane in 2026 and 3 TWh by 2030 through establishing several large-scale fertilizer and agricultural-based biogas plants in Scandinavia and Northern Europe.