Vow Green Metals (the “Company”), a leading developer of production facilities for biocarbon and other carbon-neutral products, and Vardar AS, a regional renewable energy producer with operations and ownership within bioenergy, CCU, wind, solar and hydropower, have signed a long-term energy offtake agreement securing offtake of all excess energy produced from the production facility at Hønefoss. In addition, Vardar will become an equity partner in the large-scale Hønefoss project following its recent execution of a NOK 50 million investment, subscribing for shares in VGM Operatør AS (the “Investment”). The Investment makes Vardar a significant partner in the project, holding 25 percent of the shares, and entails a capital injection of NOK 50 million in VGM Operatør to accelerate the development of the first phase of the project.
Offtake agreement:
Vardar operates the district heating network in the Hønefoss region through its subsidiary Vardar Varme AS and distributes thermal energy at Treklyngen Industrial Park where the large-scale biocarbon production facility is under development.
In relation to the completed infrastructure work on the plot of the facility, Vardar Varme invested in district heating pipes connecting the production plant to its district heating network, enabling energy offtake under the terms of the signed energy offtake agreement. Vow Green Metals is expecting to deliver about 45 GWh from the facility on an annual basis.
The large-scale biocarbon production facility at Hønefoss will become one of Europe’s largest, with its 20,000 tons production capacity and abatement potential of 100,000 tons of fossil CO2 p.a.
Investment:
Reference is made to the Company’s stock exchange announcement dated 27 November 2023 regarding Vardar’s strategic investment in Vow Green Metals, specifically their intention of becoming an equity partner of VGM Operatør AS, a wholly owned subsidiary of Vow Green Metals, holding all assets, rights and obligations related to the large-scale biocarbon production facility at Hønefoss.
Under the terms of the signed agreement, the Investment was contingent upon the passing of defined industrial and commercial milestones, most notably the signing of an offtake agreement from the project. In January, Vow Green Metals announced the signing of a long-term supply agreement for the annual delivery of 15,000 tons of biocarbon to Elkem, one of the world’s leading providers of advanced silicon-based materials.
The large-scale biocarbon production facility at Hønefoss will become one of Europe’s largest, with its 20,000 tons production capacity (10,000 tons in the first phase) and abatement potential of 100,000 tons of fossil CO2 p.a. The parties expect to see significant synergies from the collaboration, including utilization of the parties’ combined competence and capabilities within energy production, thermal heat distribution and utilization, and biomass sourcing and handling.
