Renergen has signed an initial agreement with US International Development Finance Corp. (DFC) for a loan of up to $500 million.
The debt is reportedly to finance the development of Phase 2 operations of the Renergen helium and natural gas project in Virginia.
A number of organizations have expressed interest in supporting Phase 2, Renergen said. The total amount currently interested in the project is more than $700 million, more than the company needs.
“We are in a very strong position as we begin commissioning the Virginia Gas Project plant in the coming weeks,” said Stefano Marani, CEO of Renergen.
The company “now has the capacity to adapt the conditions to our financing needs. We are in the process of optimizing Phase 2 operations as part of the ongoing due diligence process and aim to achieve a target of up to 65% debt financing, the equity balance, on the amount of the phase 2 project capital.”
The amount of debt available to Renergen “will significantly reduce the amount of equity needed,” he said. It will also ensure that there is “sufficient flexibility to meet financial commitments”.
DFC provided $40 million for the first phase of operations. It has now completed the preliminary selection for the second phase.
Renergen and the US lender will do more on the project. This may include on-site due diligence once he has ordered the first phase.
DFC disbursed the first installment of its $40 million support to Renergen in November 2019. Adam Boehler, the agency’s then-CEO, said the Virginia project would “support sustainable economic growth and promote regional stability.”
The United States removed helium from its list of critical minerals at the end of 2021. Helium production in the United States is declining. Qatar and Russia will dominate future supply.
Renergen’s Virginia project is expected to increase global helium supply by 8%.
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