Despite a tough credit climate for alternative energy companies, Richmond-based Intrinergy has secured $47 million in bank financing to build a biomass power plant in Belgium.
Intrinergy designs, builds and finances power plants that use biomass (wood chips, forest residue, or yard clippings) instead of fossil fuels to produce the steam that runs industrial plants like paper mills. The Belgian facility will also produce electricity for a European utility company.
“The complexity of an international project in finance is quite rigorous … In the current environment it was all the more intense,” said Intrinergy President and CEO John Keppler.
“To say it (the financing) had a chance of blowing up – that was something (we) worried about every day.”
Because the company’s business model relies heavily on debt (building a power plant is expensive, after all), a seizure in the credit markets could slow future growth.
“This is a real bright spot in the midst of the broader credit meltdown,” Keppler said.
Others in the green industry are having trouble funding research. From Spanish windmill manufactures to the behemoth General Electric – which makes all sorts of energy equipment — companies are reporting difficulty raising capital for projects.
Intrinergy, which was founded in 2004, recently hired several environmental permitting employees as well as a carbon specialist bringing the total Richmond employee count to around 30. That about maxes out the company’s Shockoe Bottom space, according to Keppler, but the company has no intention of moving.
Keppler said the company has plants in various stages of the permitting and financing process in Connecticut, Delaware, Pennsylvania Michigan, Alabama and South Carolina.
Intrinergy’s plants can be cheaper and more environmentally-friendly than burning oil or coal, Keppler said. The price for the biomass is less volatile because it comes from nearby each plant, and it is not directly correlated to the price of fossil fuel.
Keppler said he believed the company could invest $2 billion to $3 billion in renewable energy over the next five to 10 years.
Aaron Kremer is the BizSense Editor. Please send story ideas to [email protected]