Carbon Cycle Energy - AVANA Capital case study
Jun 5, 2020

Challenge

Carbon Cycle Energy, a leader in developing renewable natural gas facilities, was working on one of its most significant clean energy projects ever, on an 80-acre site in Warsaw, North Carolina, and was seeking construction and permanent financing. The project entailed converting an existing waste disposal system into a renewable energy-generating facility for the region. The existing facility was a pig farm and pork processing plant that did not take advantage of the potential power generation benefits of a biogas solution.

Further, the location of the facility, Warsaw County, was already known as a leader in the renewable energy field and had some of the largest solar farms in the state. By adding this renewable natural gas (RNG) facility, the county would also enhance the region’s sustainability image.

Live Oak Bank originated the $62MM project, but the bank sought a partner lender for the majority of the construction financing for the loan. Having successfully partnered on several projects with AVANA in the past, Live Oak Bank knew that AVANA’s renewable energy team could step in as a specialty construction lender to complete the financing package.

Loan Details

  • Project Type: Biogas
  • Loan Type: Conventional Construction
  • Loan Amount: $22 MM
  • Location: North Carolina

 

Live Oak Bank knew that AVANA’s renewables team could get comfortable with the technology and the construction methods, and, ultimately, perform.

Solution

As a result of the existing working relationship, Live Oak Bank knew that AVANA’s renewables team could get comfortable with the technology and the construction methods, and, ultimately, perform. Through the partnership between Live Oak Bank and AVANA, Carbon Cycle Energy was able to start on the construction of this biogas project.

As a result of this project, not only will Carbon Cycle Energy improve the air quality around the pig farm and pork processing plant, but they will also produce hundreds of new jobs during construction and operation of the plant. In addition, they will create a renewable natural gas solution that will have a significant impact on reducing greenhouse gas emissions. In turn, the RNG that will be generated by this biogas plant will be purchased by Piedmont Natural Gas, a business unit of Duke Energy, which will use this sustainable fuel to help meet its renewable portfolio standards. The long-term contract between Carbon Cycle Energy and Piedmont Natural Gas will result in a consistent renewable energy solution for North Carolina, positively impacting thousands of customers.

The WHY Behind the Deal

AVANA Capital is focused on both stimulating the U.S. economy through job creation as well as developing clean energy sources across the country. Through projects like these, AVANA Capital promotes and supports the use of renewable energy solutions, expanding the impact of clean energy in the lives of American citizens.

As a result of this biogas project, Carbon Cycle Energy will be helping to reduce methane emissions. Although carbon dioxide is often thought of as the main greenhouse gas, methane is far more harmful. Indeed, approximately 25% of all human-made global warming is the result of methane emissions. During the initial two decades after its release, methane was over 30 times more harmful than carbon dioxide; while methane does not linger as long in the atmosphere as carbon dioxide, it is far more devastating to the climate, because of its ability to absorb heat. Since methane is so potent, preventing methane from entering the atmosphere is one of the most effective ways to slow the rate of climate change.

Through this RNG facility, Carbon Cycle Energy will reduce methane emissions equivalent to 680M tons of coal, or the equivalent of the emissions from 70,000 homes or 135,000 cars every year.

See full Carbon Cycle Energy case study

Meet our Renewable Energy Team

To learn more our renewable energy practice and our financing capabilities, please contact:

Walter Cuculic,  Senior Vice President
walter@avanacapital.com

Sanat Patel, Co-Founder and Managing Director
sanat@avanacapital.com

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