Carbon recycler LanzaTech reaches financing agreement with Brookfield

NEW YORK, Oct 3 (Reuters) – Carbon recycler LanzaTech NZ Inc has reached an agreement with Brookfield Renewable Corp (BEPC.N) for a $500 million commitment by the investment firm to fund upcoming projects using technology from LanzaTech, the companies told Reuters.

Brookfield’s cash, provided through its Global Transition Fund, will be used to build and operate new projects using LanzaTech’s technology in Europe and North America.

Brookfield’s capital commitment, which will be used to support projects that meet the terms agreed to by the two companies, could eventually amount to $1 billion.

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Founded in 2005, LanzaTech has developed technology that removes carbon from emissions and converts it into sustainable fuels, fabrics and other everyday products.

This has the dual effect of preventing greenhouse gases from escaping into the atmosphere and providing materials that would otherwise have to come from traditional fossil fuel-based methods.

“LanzaTech’s technology offers a new way to decarbonize hard-to-reduce sectors across the economy,” said Natalie Adomait, Chief Investment Officer of Brookfield’s Global Transition Fund.

Jennifer Holmgren, CEO of LanzaTech, told Reuters that partnering with a blue chip investor such as Brookfield confirms the potential of the budding carbon recycling industry.

“Now we have the ability to go much faster,” she said.

Chicago-based LanzaTech has plans using its technology in China and plans to deploy it this year at an ArcelorMittal (MT.LU) plant in Belgium and an Indian Oil Corporation (IOC.NS) plant.

As part of its deal, Brookfield Renewable is also investing $50 million in an instrument that converts into shares of LanzaTech.

Earlier this year, LanzaTech struck an IPO deal with special-purpose acquisition firm AMCI Acquisition Corp II (AMCI.O) that valued the carbon recycler at $2.2 billion.

Previous backers of LanzaTech include BASF (BASFn.DE), Mitsui & Co (8031.T) and the venture capital arm of Malaysian state energy company Petronas.

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Reporting by David French in New York; Editing by Edmund Klamann

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