Renergen has signed an initial agreement with US International Development Finance Corp. (DFC) for a loan of up to $500 million.
The debt would be aimed at financing the development of phase 2 operations at Renergen’s Virginia helium and natural gas project.
A number of organisations have expressed interest in supporting Phase 2, Renergen said. The total amount now interested in the project is more than $700mn, more than the company requires.
“We find ourselves in a very strong position as we embark on turning on the Virginia Gas Project plant in the coming weeks,” said Renergen CEO Stefano Marani.
The company “now has the ability to sculpt terms to suit our financing requirement. We are in the process of optimising Phase 2 operations as part of the ongoing due diligence process and are aiming to achieve a target of up to 65% debt funding, the balance equity, on the Phase 2 project capital amount.”
The amount of debt available to Renergen “will significantly reduce the amount of equity needed”, he said. This will also ensure there is “sufficient head room to meet financial covenants”.
DFC provided $40mn for the first phase of operations. It has now finished preliminary screening for the second phase.
Renergen and the US lender will carry out more on the project. This may include on-site due diligence once it has commissioned the first phase.
Helium pressures
DFC paid out the first tranche of its $40mn support to Renergen in November 2019. The agency’s then CEO Adam Boehler said the Virginia project would “support sustainable economic growth and foster regional stability”.
The US removed helium from its list of critical minerals in late 2021. US helium production is falling. Qatar and Russia will dominate future supply.
Renergen’s Virginia project is expected to increase the global supply of helium by 8%.