The acquired assets, now renamed Net-Zero North, include the plant, pore space and operational personnel from Red Trail Energy. Credit: 3rdtimeluckystudio/Shutterstock.

Gevo has completed the acquisition of Red Trail Energy’s ethanol production plant and carbon capture and sequestration (CCS) assets in North Dakota, US.

This strategic move expands Gevo’s portfolio of energy assets, aiming to enhance its sustainable aviation fuel (SAF) facilities.

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The acquisition, valued at $210m, is expected to contribute $30m–60m of adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) annually to Gevo.

The acquired assets, now renamed Net-Zero North, include the plant, pore space and operational personnel from Red Trail Energy.

Gevo CEO Patrick Gruber said: “This transformational acquisition marks the start of Net-Zero North. Looking forward, this is a great site to expand the plant to produce SAF, along with other additional co-located projects.

“We like the potential annual adjusted EBITDA of $30m to $60m, synergies with the existing Gevo platform of assets, and having CCS assets in the Gevo portfolio as a risk mitigation tool for carbon sequestration for our Net-Zero 1 (“NZ1”) plant under development in South Dakota.

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“The proven CCS site will allow us to permanently sequester biogenic carbon dioxide to produce US products with the highest quantity and quality of carbon abatement to address a growing global market demand. Net-Zero North is a key step on our path to becoming self-sustaining and profitable as a company in advance of our NZ1 project coming online.”

The transaction was financed through Gevo equity capital and a $105m senior secured term loan from Orion Infrastructure Capital (OIC), a US-based private investment firm.

OIC investment partner and head of infrastructure credit Ethan Shoemaker said: “We are thrilled to partner with the Gevo team on this acquisition. The Net-Zero North assets bring together operating carbon sequestration, a strong track record of profitability, near-term upside from their industry-leading carbon intensity score, a strong operating team and room to grow.

“We are also excited about the potential synergies and incremental value that the Gevo team and platform of assets brings to the Net-Zero North business.”

OIC has shown interest in providing up to an additional $100m in debt for future growth projects at Net-Zero North. It is also investing $5m in equity, alongside Gevo’s equity contribution.

The investment is part of OIC’s Infrastructure Credit Strategy, which focuses on sustainable infrastructure in North America.

Ocean Park Securities served as the exclusive financial advisor and sole lead arranger for Gevo’s debt financing.