BETHESDA, Md.--(BUSINESS WIRE)--Enviva Holdings, LP (“Enviva” or “we”) announced today that its development subsidiary, Enviva Development Holdings, LLC (“Enviva Development”), entered into a new joint venture, Enviva JV Development Company, LLC, with affiliates of The John Hancock Life Insurance Company (U.S.A.) (“John Hancock”) to acquire, develop and construct wood pellet production plants and deep-water marine terminals in the Southeastern United States. The new joint venture will be managed by Enviva and supported by the Hancock Renewable Energy Group (“HREG”), a unit of the Hancock Natural Resource Group. In addition, the new joint venture has agreed to acquire a wood pellet production plant in Greenwood, South Carolina (the “Greenwood plant”), subject to certain customary closing conditions.
“We are very pleased to announce the extension of our development relationship with John Hancock and HREG. The new joint venture is expected to develop and construct new production plants and marine terminals required to serve the growing Asian and European markets,” said John Keppler, President and Chief Executive Officer of Enviva. “As the plants and terminal assets contemplated in the joint venture become fully contracted and reach commercial operation, we expect to offer them to Enviva Partners, LP, providing additional visibility into the partnership’s potential drop-down inventory.”
New Joint Venture
Through their affiliates, Enviva and John Hancock will provide the capital to the new joint venture needed to fund the acquisition of the Greenwood plant as well as the planned development of a deep-water marine terminal at the Port of Pascagoula, Mississippi and at least two additional wood pellet production facilities, subject to certain terms and conditions. The parties have agreed that Enviva Wilmington Holdings, LLC, their existing development joint venture, and Enviva Development will contribute certain wood pellet production plant and marine terminal development projects in the Southeastern United States to the new joint venture. Enviva will serve as the managing member and operator of the new joint venture.
Production Plant Acquisition
The first investment of the new joint venture is expected to be the acquisition of the Greenwood plant and related assets from The Navigator Company, S.A., a large Portuguese paper and pulp company. The acquisition is expected to close in the first half of 2018.
The Greenwood plant commenced operations in October 2016. The new joint venture expects to complete the production ramp and invest incremental capital in the Greenwood plant required to improve the operational efficiency and increase the production capacity of the facility. The production of the Greenwood plant initially will be sold to Enviva Partners, LP (the “Partnership”) under a take-or-pay off-take contract and will continue to be exported from the Partnership’s deep-water marine terminal in Wilmington, North Carolina.
“The Greenwood plant is well-constructed, strategically located in a deep natural resource basin and has a strong manufacturing base to build on,” said Keppler. “Enviva is a proven acquirer and we are excited to bring this team into the Enviva family and to grow this plant into a world-class production facility. As the Partnership has continued to extend its contracted position, high-quality, low-cost pellets from Greenwood will be an important part of meeting its growing customer demand.”
The existing joint venture between affiliates of Enviva and John Hancock will retain ownership of Enviva Pellets Hamlet, LLC, the entity constructing a 600,000 metric tons per year production plant in Hamlet, North Carolina (the “Hamlet plant”). Enviva expects the Hamlet plant will be operational in the first quarter of 2019. Production from the Hamlet plant is contracted to supply MGT Power’s Teesside Renewable Energy Plant, which currently is under construction in the United Kingdom.
About Enviva Holdings, LP
Enviva Holdings, LP is the world’s largest producer of wood pellets, a renewable and sustainable energy source used to generate electricity and heat. Through its subsidiaries, Enviva Holdings, LP owns and operates plants in the Southeastern United States that produce nearly 3 million metric tons of wood pellets annually. We export our pellets primarily to power plants in the United Kingdom and Europe that previously were fueled by coal, enabling them to reduce their lifetime carbon footprint by about 80 percent. We make our pellets using sustainable practices that protect Southern forests, and we employ about 600 people and support many other businesses in the rural South, where jobs and economic opportunity are sometimes scarce. Enviva Holdings, LP conducts its activities primarily through two entities: Enviva Partners, LP, a publicly-traded master limited partnership (NYSE: EVA), and Enviva Development Holdings, LLC, a wholly-owned private company. To learn more about Enviva, please visit our website at www.envivabiomass.com.
Cautionary Note Concerning Forward-Looking Statements
Certain statements and information in this press release, including those concerning future results of operations, acquisition opportunities, and distributions, may constitute “forward-looking statements.” The words “believe,” “expect,” “anticipate,” “plan,” “intend,” “foresee,” “should,” “would,” “could,” or other similar expressions are intended to identify forward-looking statements, which are generally not historical in nature. These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effects. Although management believes that these forward-looking statements are reasonable when made, there can be no assurance that future developments will be those that management anticipates. These forward-looking statements involve significant risks and uncertainties (some of which are beyond our control) and assumptions that could cause actual results to differ materially from our historical experience and our present expectations or projections.