VARO secures first green loan for $165 million

VARO Energy (VARO) has announced the successful placement of a $165 million (€150.1m) green loan, the first in the company’s history.
The green loan, part of a wider $3.33 billion (€3bn) financing announced separately today, will partly refinance VARO’s acquisition of the Bio Energy Coevorden (BEC) biogas manufacturing facility.
The green loan represents an important milestone in the development of VARO Energy’s biogas business, one of the company’s five strategic growth pillars under its ONE VARO Transformation strategy, said the company.
Since launching the strategy in July 2022, VARO has built a material business in biogas, acquiring BEC – the largest biogas manufacturing facility in Northern Europe – and Renewables Energy Services (RES), the leading trader of biogas and green credits.
VARO is now scaling its biogas business and is set to more than double the manufacturing capacity of BEC to 650 GWh of biogas by 2026.
In addition, the company has a material trading capacity of 1TWh of biogas and green certificates a year.
The green loan was independently assessed and verified by ISS ICS.
The report found that VARO defined a formal concept for its green loan in terms of use and management of proceeds and reporting which is compliant with the Loan Market Association’s Green Loan Principles.
Further, the report stated that the use of proceeds from the green loan was in line with the UN’s Sustainable Development Goals 7 (provision of affordable and clean energy) and 13 (providing climate action).
Finally, the report identified that VARO’s sustainability objectives and rationale for issuing the green loan has been clearly described and aligns with the sustainability strategy of the issuer.
Dev Sanyal, CEO of VARO, said: “In July 2022 we announced our plan to build Biogas as one of our five strategic growth pillars. Since then, we have successfully acquired BEC, Northern Europe’s largest biogas manufacturing facility, and RES, a major trader of biogas.
"Today, as part of building out the Biogas business, we have secured a certified $165 million green loan, meeting stringent ESG criteria set out by the Loan Market Association’s Green Loan Principles. It also represents an important signal from the financial markets which recognizes the progress we have made in delivering against our ONE VARO Transformation strategy to become a net zero company by 2040.”