Goldman Sachs makes 1 billion euros biomethane bet in Europe

GOLDMAN Sachs Group is betting on biomethane, a renewable gas that can be made from food and animal waste or other organic matter.

The firm plans to invest more than 1 billion euros (S$1.4 billion), including debt, into Verdalia Bioenergy, a new company that plans to acquire, build and operate biomethane plants in Europe, said Tavis Cannell, global co-head of infrastructure at Goldman Sachs Asset Management. Its investment through the West Street Global Infrastructure Partners IV fund will be made over four years.

Demand for biomethane is supported by European government incentives amid a commitment to be carbon neutral by 2050, prompting investment by companies including Shell and TotalEnergies.

“We are excited to contribute to the energy transition bringing much-needed biomethane supply to Europe, which will support the continent’s decarbonisation and energy-security agenda,” Cannell said.

Verdalia, led by Fernando Bergasa and Cristina Avila, has agreed to purchase five biomethane plants in Spain, and aims to invest in other early-stage development projects as well as larger, operational assets, Cannell said. Goldman has worked with Bergasa and Avila before when the executives helped lead Redexis, a Spanish natural gas platform that was backed by the New York-based bank.

In addition to Spain, Verdalia may expand into Italy and other European countries where the industry is nascent, Cannell said. Unlike hydrogen, biomethane can use existing gas infrastructure, according to Matteo Botto Poala, an infrastructure-focused managing director at Goldman’s asset-management arm.

The investment in Verdalia follows Goldman’s formation of the Japan Renewable Energy business amid a shift in the country’s energy policy after the Fukushima nuclear disaster. Eneos Holdings acquired the platform in 2022. BLOOMBERG