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Danish biogas plant assured crucial entry into the USA

With EKF's assistance, Bigadan was able to realise its potential to establish itself on the American market with 100 per cent guarantee coverage for Bigadan's Danish bank.
Case facts
What
Bigadan supplies biogas plant to buyer in the USA
How much
USD 5.8 million
EKF's role
Prepared the entire project and arranged project financing with a 100 per cent guarantee.
EKF product
Project financing guarantee; EKF cleantech guarantee
When
2010-2026
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  • Step 1
    The challenge
    Quote

    There was the commitment at EKF to achieving a successful outcome for this project. I am optimistic and full of expectation for future projects.

    Karsten Buchhave, CEO, Bigadan A/S

    ​Bigadan has more than 25 years of experience in establishing biogas plants in Europe, and through two American partners became interested in expanding to the USA.

    In New York State on the east coast of America, there was an opening for Bigadan to establish a number of biogas plants for farms with abundant supplies of manure. There were also good prospects for selling the energy generated by the plants.

    However, in the USA, biogas is a new technology, and therefore difficult to obtain traditional financing for. Besides which, Bigadan made its entry into the market in 2008 just as the financial crisis had taken hold.

    "Our biggest challenge was to get the project financed at a time when the financial market was in melt-down. It proved impossible to get anything financed by the banks," says Karsten Buchhave, CEO, Bigadan.​​

  • Step 2
    The process

    ​Bigadan contacted EKF for assistance in establishing a number of biogas plants. In the initial phase, the aim was to establish just a single biogas facility worth USD 5.8 million as a reference facility in the USA.

    But the economic crisis, the limited scale of the project and American scepticism about the technology meant that both US and Danish banks declined to assume any of the project risk.

    EKF was willing to give the project a chance and saw the entire project phase through independently. This task is normally undertaken jointly with the company's bank.
     
    This meant that EKF exceptionally undertook all the analyses and assessments and conducted all the negotiations with attorneys, the bank, engineers and partners.

  • Step 3
    The solution

    Based on the assessments and analyses, EKF offered to bear the entire risk in the form of a 15-year project financing with a 100 per cent guarantee. This meant that Bigadan's Danish bank Sparbank was now willing to offer the project a loan.

    Bigadan was now in a position to set up an independent project company with its two American partners, and launch the project.

    With EKF's assistance, Bigadan was thus able to establish a crucial reference project on the North American market.

    "The project in the USA is decisive for Bigadan's prospects. We have introduced a new project model whereby we build, own and operate the biogas plant combined with a guarantee from EKF. This model is intended to kick-start our entry into the USA, which could potentially be our biggest market," says Karsten Buchhave, CEO of Bigadan.

    The first biogas plant is scheduled to come on-stream in late 2011, and Bigadan is already in negotiations for a number of new plants in the USA.​

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