VARO Energy announces it has successfully completed a $3.33 billion financing, comprising a $1.13 billion loan and a $2.2 billion Borrowing Base Facility. The issuance results in the upsizing of its corporate debt facilities with a highly flexible structure including $831 million of additional capital to invest in the ONE VARO Transformation strategy.

• Initial debt launch oversubscribed: with the loan size increased by 13% from the original $1 billion to $1.13 billion due to demand.
• Banking syndicate expanded: with a total of fifteen lenders and five sureties in the syndicate, including four new lenders joining the round alongside VARO’s existing lending banks.
• $165 million green loan raised for first time: VARO successfully met the stringent ESG criteria for the partial refinancing of the Bio Energy Coevorden acquisition.
• Refinanced Borrowing Base Facility and Ancillary Guarantee Facility: strong demand from banks and sureties in refinancing $2.2 billion BBF and $710 million AGF.
• Increased financial flexibility: both the Revolving Credit Facility and Term Loan facility are unsecured.
• New funds raised invested in delivering ONE VARO Transformation strategy: positioning VARO as the energy transition partner of choice supporting customers to decarbonize.

See related article: Lufthansa Group and VARO Energy Sign MoU for Cooperation in the Field of Sustainable Aviation Fuels

The financing announced is an important step towards realising VARO’s plans to invest $3.5 billion over the five years to 2026. This investment, two thirds of which will go into VARO’s sustainable energies business, will support the scaling and development of five strategic growth pillars: biofuels, biogas, e-mobility, nature-based carbon removals, and hydrogen.

Since launching the ONE VARO Transformation strategy in July 2022 the company has made material investments in biogas through the acquisition of BEC, Northern Europe’s largest biogas facility, and Renewable Energy Services (“RES”), a leading trader of biogas and Green Certificates. VARO has also increased its stake and announced expansion plans in E-Flux, the leading provider of software for vehicle charging for commercial vehicles and signed a Memorandum of Understanding with Lufthansa to supply Sustainable Aviation Fuel.

Commenting on the successful financing round, Dev Sanyal, CEO of VARO Energy, said:

”In the last year we have executed on our ONE VARO Transformation strategy with acquisitions in biogas, e-mobility and biofuels. With this $3.33 billion financing, VARO reaches another important milestone. First, the loans significantly boost our financial strength to accelerate the transformation of our business. Second, the level of interest shown by the lenders and the securing of our first ever green loan demonstrates confidence in our strategy to reach net zero by 2040 and become the energy transition partner of choice for customers.“