Brookfield commits $500m to carbon recycling specialist LanzaTech
Brookfield Renewable, a business controlled by Brookfield Asset Management, has agreed to invest USD 500m in LanzaTech, a US carbon recycling specialist with a significant Asia presence.
The capital will be deployed in stages upon agreed project development milestones from the Brookfield Global Transition Fund, which was said to be the largest dedicated energy transition fund globally after reaching a final close last June of USD 15bn.
Separately, Brookfield will invest USD 50m in LanzaTech to support further corporate development. It will be the company’s preferred capital partner for carbon capture and transformation projects in Europe and North America.
The partnership does not preclude LanzaTech’s decision last March to merge with a NASDAQ-listed special purpose acquisition company (SPAC) at a valuation of USD 1.8bn. The SPAC, called AMCI Acquisition, is led by Nimish Patel, formerly of US-based GP Great Hill Partners and India’s ChrysCapital Partners.
“Creating a new carbon economy will require new ways of financing technology scale up and deployment,” LanzaTech CEO Jennifer Holmgren said in a statement.
“Together [with Brookfield], we have the potential to target significant commodity markets and keep fossil resources in the ground. Each additional plant deployed has the potential to keep the equivalent of around 100,000 tons of carbon from the atmosphere each year.”
LanzaTech was founded in New Zealand in 2005 and relocated to the US in 2014 after receiving a number of research incentives and tax credits from local authorities. The company, which focuses on turning industrial carbon waste into useful feedstock, also maintains bases in China and India.
Core operations include converting carbon through a process called biocatalysis, which uses natural biological materials to transform emissions into fuels and chemicals. The company claims that its technology allows steel mill emissions to be converted into sustainable aviation fuel, clothing ranges, laundry detergent, household cleaner, and fine fragrances.
LanzaTech has projected its revenue will increase from USD 26m in 2021 to USD 65m in 2022 and hit USD 966m by 2026. EBITDA is expected to fall from USD 44m to USD 38m, then rise to USD 426m over the same period. The company estimates its current engagements represent a USD 7bn revenue opportunity.
Previous investors include Sinopec Capital, New Zealand Superannuation fund, CICC Investment Group, K1W1, Khosla Ventures, Malaysian Life Sciences Capital Fund, Qiming Venture Partners, SB China Venture Capital, Novo Holdings, and Dialog Group, and the VC unit of German industrial conglomerate Siemens.
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