Goldman Sachs Asset Management eyes European RNG with Verdalia Bioenergy

As the primary investing area within Goldman Sachs, Goldman Sachs Asset Management delivers investment and advisory services for the world’s leading institutions, financial advisors, and individuals, overseeing more than US$2 trillion in assets under supervision worldwide as of December 31, 2022.

Established in 2006, the Infrastructure business within Goldman Sachs Asset Management has consistently navigated the evolving infrastructure asset class, having invested approximately US$15 billion across market cycles since its inception.

First acquisitions agreed

Verdalia Bioenergy will be looking to invest in both early-stage development projects and larger operational assets.

The company has already signed its first agreement to purchase, subject to regulatory approval, a portfolio of biomethane projects in mid-stage development in Spain, with a total capacity of approximately 150 GWh per annum.

To lead Verdalia Bioenergy, Goldman Sachs Asset Management has partnered with Fernando Bergasa and Cristina Avila, who both have a strong track record of value creation and operational excellence in the natural gas sector.

Under their leadership, Verdalia Bioenergy aims to become a leading biomethane operator, starting from Spain and subsequently expanding across Europe, and to deploy in excess of EUR 1 billion over the next 4 years.

We are excited to work with Goldman Sachs Asset Management on this journey and benefit from their investment experience. Renewable gas will be a key tool for Europe to achieve its commitment to be carbon neutral by 2050. We are looking to acquire mid to late-stage development projects and operational assets across Europe as we pursue our vision of developing Verdalia Bioenergy into a leading European player in the biomethane industry, said Fernando Bergasa, Executive Chairman of Verdalia Bioenergy.

Ten-fold growth opportunity in Europe

According to the European Biogas Association (EBA), the current production of biogas and biomethane has already created more than 210 000 green jobs in Europe and is saving 60 million tonnes of greenhouse gas (GHG) emissions (carbon dioxide equivalents – CO₂eq) every year, comparable to the annual GHG emissions of Sweden.

As such, the sector is set to play a critical role in achieving net zero targets and energy independence.

The target set by the EU of 370 TWh of biomethane production by 2030, approximately a ten-fold increase of current production, is expected to require investments of around EUR 80 billion.

In Spain for instance, Sedigas estimates a biomethane production potential of 163 TWh/year, which could cover as much as 45 percent of today’s national demand for natural gas and a higher share in the future.

Goldman Sachs Asset Management has made numerous landmark energy transition investments including the creation of Japan Renewable Energy (JRE), one of the largest Japanese renewables businesses, to address the shift in Japan’s energy policy.

Goldman Sachs Asset Management has a long history of creating and building scaled players within the green energy space. We are excited to contribute to the energy transition bringing much-needed biomethane supply to Europe, which will support the continent’s decarbonization and energy security agenda, said Tavis Cannell, Global Co-Head of Infrastructure within Goldman Sachs Asset Management.

According to the company, the European biomethane market is going through a similar structural change driven by the strong secular trends of decarbonization, circular economy, and energy independence.

We believe that biomethane is today one of the most compelling segments in the energy transition for infrastructure investors and look forward to the partnership with Fernando and Cristina on this exciting investment, ended Matteo Botto Poala, Managing Director in the Infrastructure business within Goldman Sachs Asset Management.