California Gives OK to Debt For Novel Waste-to-Gas Plant
(Bloomberg) -- A company developing what it says is the first plant converting food waste and wastewater into natural gas won initial approval from a California agency Tuesday to raise $13 million in the tax-exempt debt market to finance it.
SoCal Biomethane, LLC plans to upgrade an existing facility from the Victor Valley Wastewater Reclamation Authority to include an anaerobic digestion system to produce gas that would be transported by a Southwest Gas pipeline, according to a staff report of the California Pollution Control Financing Authority. The authority’s board unanimously approved its request to draw on the state’s federal allocation of private activity debt, which are tax-exempt securities issued on behalf of qualifying projects.
The company, a subsidiary of Anaergia Inc., said the Victorville plant will divert up to 300 tons of organic waste from landfills and create 320,000 MMBTU (one million British Thermal Units) per year of renewable natural gas. The reduction in greenhouse emissions achieved by the project is equivalent to taking 14,500 cars off the road, it said.
Live Oak Banking Co. is expected to purchase the unrated notes, with a target closing in June. Another state agency, the California Debt Limit Allocation Committee, must sign off on the sale at its meeting next week.
The pollution authority also approved the company’s request for $18,000 in aid from the state’s small business assistance fund to help defray the cost of issuing the debt. The company expects to complete the plant within a year after closing.
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