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Greenlane Renewables Inc.
(GRN-T) C$0.80
Development Project Announced Event
Greenlane will deploy $0.7 million in development capital toward a landfill gas-to- RNG project.
Impact: POSITIVE
Details: Greenlane will deploy $0.7 million (US$0.5 million) in the form of a convertible note loan toward a landfill gas project that has a $23.0 million (US$18.0 million) capital cost. The midwestern U.S. based project is in a pre-construction phase, and is expected to generate over 250,000 MMBtu/year. No specific offtake agreements have been determined at this time, but Greenlane has identified the transportation market (RIN/LCFS) or a long-term offtake with a natural gas utility as likely options. Greenlane funds will be released when specific milestones are achieved and are intended to progress the project toward a construction financing stage in Q4/22. Greenlane has the option to convert the note into an equity interest in the development company.
TD View: As shown in Exhibit 1, this announcement marks the second deployment of development capital since the company initiated this strategy in 2021. In our view, individual announcements are not likely to be material, but this initiative may become relevant in aggregate over time. A key part of the strategy for Greenlane is to ensure that it also secures the sale of its biogas upgrading systems, and note that this announcement is likely to result in a follow-on equipment sale award if the project ultimately goes ahead. We have not made any specific modelling assumptions related to development capital opportunities and will update our forecast following a discussion with management and at the next available opportunity.
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