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The AIM-listed Ludgate Environmental Fund has invested €3 million into agri.capital, the specialist developer, owner and operator of biogas plants in Germany.
The investment has been structured as 8% preferred stock with detachable warrants and is part of a €10 million funding round into agri.capital with Valiance Special Situations Fund investing alongside LEF.
agri.capital was established in 2004. The company uses manure and various crop silages as feedstock to produce biogas as they decompose. This methane-rich gas mixture is either burned onsite to create electricity or cleaned to biomethane and fed into the existing German natural gas network. The fermentation residue is used as a high-quality fertilizer, returning nutrients to the soil.
Germany has approximately 16.8 million hectares of agricultural land, less than 2% (some 300,000 hectares) of which is currently used for biogas feedstock production. Each year, efficiency and productivity increases in the German agricultural sector free up approximately 180,000 hectares of land for agricultural use. A study carried out by the Leipziger Institut für Energetik und Umwelt in 2007 concluded that, by 2020, the natural gas supply of the EU and Turkey could be replaced by bio-methane without impact on the agricultural self-sufficiency for food production.
"agri.capital uses proven technology, has high and predictable cash flows and can rapidly roll-out fixed-price plants,” said Nick Pople, director of Ludgate Investments, LEF's investment adviser. “The company has secured locked-in feedstock contracts and plants have stable revenue streams. By combining construction, facility and resource management, financing, logistics and contracting operations in-house, agri.capital is able to efficiently provide reliable, renewable baseload power and heat to the German market."
Ludgate Environmental Fund is a Jersey domiciled closed-ended investment company, listed on AIM under the symbols LEF.L for the shares and LEFW.L for the warrants. The fund was launched in August 2007, raising £26.7 million at listing. A further £21 million was raised by the fund last year.
LEF was launched to enable experienced and sophisticated investors to participate in a diverse portfolio of investment holdings in environmental/cleantech companies.