Enviva Holdings goes into JV and acquisition of wood pellet production plant
Staff Writer |
Enviva Holdings announced that its development subsidiary, Enviva Development Holdings, entered into a new joint venture, Enviva JV Development Company, with affiliates of The John Hancock Life Insurance Company (U.S.A.).
Article continues below
It is to acquire, develop and construct wood pellet production plants and deep-water marine terminals in the Southeastern United States.
The new joint venture will be managed by Enviva and supported by the Hancock Renewable Energy Group (HREG), a unit of the Hancock Natural Resource Group.
In addition, the new joint venture has agreed to acquire a wood pellet production plant in Greenwood, South Carolina, subject to certain customary closing conditions.
Through their affiliates, Enviva and John Hancock will provide the capital to the new joint venture needed to fund the acquisition of the Greenwood plant as well as the planned development of a deep-water marine terminal at the Port of Pascagoula, Mississippi and at least two additional wood pellet production facilities, subject to certain terms and conditions.
The parties have agreed that Enviva Wilmington Holdings, LLC, their existing development joint venture, and Enviva Development will contribute certain wood pellet production plant and marine terminal development projects in the Southeastern United States to the new joint venture. Enviva will serve as the managing member and operator of the new joint venture.
The first investment of the new joint venture is expected to be the acquisition of the Greenwood plant and related assets from The Navigator Company, S.A., a large Portuguese paper and pulp company. The acquisition is expected to close in the first half of 2018.
The Greenwood plant commenced operations in October 2016. The new joint venture expects to complete the production ramp and invest incremental capital in the Greenwood plant required to improve the operational efficiency and increase the production capacity of the facility.
The production of the Greenwood plant initially will be sold to Enviva Partners) under a take-or-pay off-take contract and will continue to be exported from the Partnership’s deep-water marine terminal in Wilmington, North Carolina.
The existing joint venture between affiliates of Enviva and John Hancock will retain ownership of Enviva Pellets Hamlet, the entity constructing a 600,000 metric tons per year production plant in Hamlet, North Carolina.
Enviva expects the Hamlet plant will be operational in the first quarter of 2019. Production from the Hamlet plant is contracted to supply MGT Power’s Teesside Renewable Energy Plant, which currently is under construction in the United Kingdom. ■
A hyperactive weather pattern will bring an expansive low pressure system across mainland U.S., resulting in widespread impactful weather to progress from west to east across the country through the next few days.