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Bavaria’s State Premier Markus Soeder, German Minister of Education and Research Bettina Stark-Watzinger and German Chancellor Olaf Scholz watch Eavor Technologies workers handling a drill part during their visit of a “green energy” innovative geothermal energy station in Geretsried, Germany, Aug. 24, 2023.POOL/Reuters
A new federal financing agency set up to attract private-sector partners to commercial, climate-related projects is making its first clean-technology investment, plowing $90-million into an Alberta-based geothermal energy developer.
The $15-billion Canada Growth Fund said on Wednesday it is providing the money to Eavor Technologies Inc., which generates baseload heat and power using a closed-loop geothermal system it invented. The fund, which is managed by public sector pension fund manager PSP Investments, said that Eavor’s technology has the potential to cut greenhouse gas emissions globally, and its expansion will boost employment in Canada.
One part of the CGF’s mandate is to invest in Canadian clean-tech companies that are in the process of scaling up projects that have entered the commercial stage, and Eavor’s technology, called Eavor-Loop, fits that bill. The investment will help the company create new jobs and keep its work force in Canada, it said in a statement. Eavor conducts its engineering and design work at its Calgary headquarters.
In August, Eavor made headlines when it launched its first commercial Eavor-Loop geothermal project, in Germany. The event included German Chancellor Olaf Scholz and Bavarian Prime Minister Markus Söder.
The company developed its first full-scale demonstration project in 2019, near Rocky Mountain House, Alta. German officials were impressed, offering Eavor access to incentives to inject more geothermal power into the country’s grid as it moves away from nuclear.
First announced in the 2022 federal budget as an arm’s-length public investment fund, the CGF is set up to deploy a combination of financial instruments – including equity, debt, contracts for difference and offtake agreements – to de-risk investments for the private sector and help achieve the country’s climate targets. But it must also earn enough returns to remain capitalized at around $15-billion.
In a recent interview with The Globe and Mail, Patrick Charbonneau, CGF’s chief executive, said more than 60 potential investments are in the fund’s pipeline, and about 20 have been prioritized. More announcements will be made soon, he said.
When it comes to the clean-tech sector, the fund said it aims to act as a bridge across a gap in liquidity that is chronic in the Canadian market, and which pressures companies in the commercialization and scale-up stages. The investment in Eavor is a commitment of $90-million in series B preferred equity, which will allow the company to scale up while retaining intellectual property, the fund said.
