Riverstone Energy Limited Announces Commitment of $25 million to Riverstone Enviva Vehicle
London, UK (23 July 2020). Riverstone Energy Limited (the "Company" or "REL") has made a $25 million commitment to participate in the recapitalisation of Enviva Holdings, LP ("Enviva"), which is being effected with more than $1 billion of new equity contributions and incremental equity commitments from affiliates (the "Continuation Fund" and the "Rollover Fund") of Riverstone Holdings LLC ("Riverstone"). Enviva is the world's largest supplier of utility grade renewable biomass fuel in the form of wood pellets, which serve as a replacement for coal in power generation.
REL's indirect investment in Enviva is structured through its participation in the Continuation Fund, on which the Company will not pay fees. The Continuation Fund was formed by Riverstone in partnership with a diverse group of institutions with deep, global expertise in sustainable investing, energy, forestry, finance, and industrial operations, for the sole purpose of investing in Enviva. The Goldman Sachs Vintage Funds, Mubadala, and BTG Pactual anchored the Continuation Fund, alongside additional investments from affiliates of funds managed by Fortress Investment Group LLC, Neuberger Berman, and GCM Grosvenor, among other institutional investors. The new capital contributions from the Continuation Fund were used to pay the transaction consideration to Enviva's prior investors, primarily consisting of limited partners of Riverstone/Carlyle Renewable and Alternative Energy Fund II, L.P. Incremental equity commitments from the Continuation Fund and the Rollover Fund, which total approximately $300 million, will be able to be called to finance Enviva's substantial pipeline of future growth projects. Following the recapitalisation, Riverstone continues to own and control the general partner of Enviva Holdings. Enviva Holdings owns the general partner and approximately 34 percent of the common units of its publicly listed master limited partnership, Enviva Partners, LP (NYSE: EVA).
The market for wood pellets has increased rapidly over the past decade and is expected to continue expanding as utilities and regulatory regimes globally seek to displace coal generation with renewable sources. Including a recently announced acquisition that will close shortly and expansion projects currently underway, Enviva owns and operates nine plants with a total production capacity of approximately 5.4 million tonnes per year and owns or manages five deep-water terminals with total storage capacity of approximately 300,000 tonnes. Enviva's production capacity is fully contracted through long-term, take-or-pay contracts with high-quality creditworthy counterparties. Enviva's executed contracts have a weighted average remaining term of approximately 13.6 years and represent a contracted revenue backlog of approximately $19.6 billion.
The Enviva investment, held through the Continuation Fund, further supports REL's focus on environmental, social and governance initiatives and offers the ability to take advantage of energy transition trends. Given Enviva's contracted cash flows as well as substantial growth opportunities, REL also believes that Enviva is positioned to generate strong risk-adjusted returns while also providing a measure of downside protection to REL's shareholders. Consistent with REL's previously announced modified investment approach, REL's commitment is being made on a standalone basis, as Riverstone's diversified investment funds did not participate in the Enviva investment.
Richard Hayden, Chairman of REL's Board commented: "We believe that the impacts of climate change highlight the need for the world to shift to low carbon power generation sources. Our investment in Enviva supports the efforts to manage climate change risk globally, while also providing an opportunity to create value for shareholders. Enviva's contracted business model has also proven to be resilient in a volatile market environment, which we believe will be highly advantageous to our investment."
About Riverstone Energy Limited:
REL is a closed-ended investment company that invests exclusively in the global energy industry across all sectors. REL aims to capitalise on the opportunities presented by Riverstone's energy investment platform. REL's ordinary shares are listed on the London Stock Exchange, trading under the symbol RSE. REL has 10 active investments spanning oil and gas, renewable energy, power and energy services in the Continental U.S., Western Canada, Gulf of Mexico and Europe.
For further details, see www.RiverstoneREL.com
Neither the contents of Riverstone Energy Limited's website nor the contents of any website accessible from hyperlinks on the websites (or any other website) is incorporated into, or forms part of, this announcement.
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