DWS, one of the largest asset managers in Europe, and MEAG, the asset manager of Munich Re and ERGO, announced today the joint acquisition of German biomethane and biogas producer Weltec.
Based in Vechta, Lower Saxony, Weltec owns and operates five biomethane and four biogas plants across Germany.
Biogas is produced from organic waste, such as agricultural, industrial, and household wastes, in anaerobic digesters at waste facilities or landfill sites, and then further processed to produce biomethane/bio-LNG. Biomethane is chemically identical to fossil-based natural gas, but has substantially lower lifetime greenhouse gas emissions, enabling it to support the decarbonization of hard-to-abate sectors such as road transport and heavy industry, without needing to replace existing transmission and distrinfrastructure sectors ibution infrastructure.
According to the firms, the acquisition comes as the biomethane market in Europe is poised to expand rapidly, with production targeted to grow tenfold by 2030, according to the RePowerEU plan, the EU strategy to ramp clean energy capacity and rapidly reduce reliance on Russian fossil fuels.
Dominik Damaschke, Head of Infrastructure Equity at MEAG said:
“The increasing role of biomethane for the decarbonisation of the transport sector and the transformation of the energy industry ensure a strong long-term demand for biomethane. Accordingly, we expect sustainable attractive returns for our investors in a promising business area.”
Under DWS and MEAG, Weltec aims to invest to significantly increase its biomethane production volumes, including upgrading its biogas plants to produce biomethane, and transitioning the plants’ feedstock mix to sustainable, waste-based sources. Weltec said that its investments will also include installing onsite CO2 liquefaction technology to further reduce its carbon footprint.
Weltec CEO Jens Albartus said:
“With DWS and MEAG, we are pleased to have found strong shareholders that support us on our path of continuous growth. Our strategy of extending and enhancing our portfolio of renewable gas and energy production assets to support the decarbonisation and further strengthen the European energy independence is fully aligned with the investment approach of DWS and MEAG.”
DWS’ investment was made on behalf of its third institutional Pan-European Infrastructure Fund (PEIF III). Launched in 2019, the fund raised €3 billion at its final close in 2021.
Thomas Kalthoefer, Senior Principal for Infrastructure Investments at DWS said:
“We are pleased to be working with MEAG to further invest in Weltec’s existing portfolio of high-quality assets, against the backdrop of the critical European energy transition to more renewable sources. With this acquisition, we see attractive growth potential via both greenfield and brownfield opportunities, supported by the company’s integrated feedstock procurement and logistics business, which provides Weltec with secure and direct access to farmers and raw materials.”