INNISFAIL – It was nearly five months ago when Sean Collins made his first pitch to Innisfailians of Varme Energy’s bold plan to build a $175 million waste-to-energy plant in town.
Collins, Varme’s chief executive officer, was back in Innisfail on Jan. 15 to let town council know the outlook for his Edmonton-based company, a Canadian subsidiary of Norway-based Green Transition Holdings, is better than expected since he addressed a crowd of about 40 curious Innisfailians at a local town hall meeting on Aug. 25.
“I think the overall level of interest in what we're doing has exceeded my expectations significantly,” Collins told council. “I think some of the things like now having Norwegian federal government interest in support is really material. The overall corporate and capital interest has been extremely strong.”
However, he added later to the Albertan, there’s still a long road ahead before actual plant construction can begin on 13 acres of land in Innisfail’s Southwest Industrial Park. Varme is hoping it can begin sometime in 2024.
“If I was picking a number, I would say we’re a third of the way there,” said Collins. “We've got some good lines of sights for potential waste. We’ve got some good lines of sights for potential offtakers and we've got some great investment conversations underway.
“But we don’t have all the waste we would need. We don't have all the investment we would need,” Collins added. “I don't want to set expectations that we're at the finish line. But we've definitely gotten off the start line, and it’s gone pretty quick.”
Mayor Jean Barclay, a strong supporter of Varme’s initiative, said it was always known there would be “strong headwinds” to overcome but Varme’s hard work, enthusiasm and energy has produced tangible positive results over a short period of time.
“So, now it's a matter of continuing this momentum and let's continue to build on it and move forward,” said Barclay. “They (Varme) are closer than they were three months ago. Are they across the finish line? No, not close. We are still making waste. We still need to have more dialogue with other municipalities to see if they want to participate.
“It’s a matter of looking at the future. Do we want to continue to have our waste going into the ground? Or, can we look at better options?” added Barclay. “It's not just about the energy production. It’d also about reducing landfills.”
Since last August, Varme has signed a joint working agreement with the Ermineskin-owned Neyaskweyahk Group of Companies; a pact that could see the group -- the largest shareholder of the First Nations Bank of Canada -- become a project investor and partner across Varme’s portfolio of projects in Alberta, including Innisfail and Alberta's Industrial Heartland northeast of Edmonton.
“We are doing our corporate banking through First Nations Bank of Canada and I've been really pleasantly surprised at their passion for the project,” said Collins, adding the Neyaskweyahk Group has been helping with outreach to other potential First Nations investors.
He told council Varme has received a signed letter of intent from the Norwegian federal government to provide up to a 50 per cent loan guarantee for its Alberta projects.
“We’ve also had material dialogue and conversation with the Canada Infrastructure Bank that has expressed interest in the projects as well,” Collins told council. “So, we’re feeling quite supported by both the Norwegian federal government and the Canadian federal government.”
As for the regional support for the project, Collins noted there has been waste-to-energy discussions with the mayors and councils of Blackfalds and Rocky Mountain House.
Although no memorandums of understanding have yet been signed with the two communities, he said if they were on board with the Town of Innisfail to provide waste to the planned Innisfail facility it would provide the project 40 per cent of what it would need to have it contracted.
“We want to get closer to 80 per cent contracted but it would be materially in the game,” Collins told the Albertan after his council presentation. He noted 80 per cent is required to raise bank financing for the project.
Collins told council Alberta-based costing studies for the waste energy facility and carbon capture and storage integration began in December and are expected to be completed in May.
He added Varme is actively engaged with a shortlist of construction partners, a process involving a Norwegian engineering team.
“So far we have been very pleasantly surprised at the level of interest from the engineering and construction industry for these projects,” said Collins.
As for the next update for the Innisfail project, Collins said there is not “anything specifically on the books” but he is “frequently” in contact with administration and council and is confident there would be some kind of update within a three to four-month time frame.
