BlackRock acquired the US-based company from Vision Ridge Partners, a sustainable infrastructure-focussed investment platform at an enterprise value of $700 million. Additionally, BlackRock could spend more than $1 billion in financing Vanguard Renewables’ expansion, according to a source. The expansion includes plans to commission more than 100 anaerobic digesters to produce renewable natural gas (RNG) across the country by 2026. Vanguard focusses on the mitigation of greenhouse gas (GHG) emissions from food waste and cow manure through anaerobic co-digestion processes that converts food waste and dairy manure into RNG and low-carbon fertilizer. A portion of the company’s RNG is produced under a multi-year partnership with major US utility Dominion Energy since 2019.
BlackRock’s move to enter the RNG sector in the US comes at an opportune moment. On the 20th of July, two senators introduced the Renewable Natural Gas Incentive Act, bipartisan legislation to provide a tax credit for heavy-duty vehicles that use RNG. Previously, RNG received a lower tax credit than similar transportation fuels. The Renewable Natural Gas Incentive Act would create a $1.00 per gallon tax credit for sellers of RNG used for transportation.
BlackRock’s renewables investments have been primarily focused on the onshore wind, utility-scale solar and distributed solar sectors, with some recent initiatives targeting the carbon capture and storage (CCS) and electric vehicle (EV) segments. The company’s portfolio geographically diverse, spanning high-growth markets in such as Asia, South America and Europe, along with a sizeable asset base in the US. The firm’s Global Renewable Power platform, which closed a $4.8 billion fund in Apr’21, has invested in over 250 wind and solar projects across 13 countries. In Apr’22 Blackrock CEO Larry Fink stated that it sees the opportunity to launch three additional renewable energy-focused funds, primarily due to concerns around energy security that were exacerbated by the war in Ukraine.
The above analysis is proprietary to Enerdatics’ energy analytics team, based on the current understanding of the available data. The information is subject to change and should not be taken to constitute professional advice or a recommendation.
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