$18 Million in Sustainable Finance Supports 8MW Cogeneration
JBS Foods USA’s use of C-PACE financing from Counterpointe demonstrates the capacity for the program to support the sustainability goals of large corporates and industrial sites.
Date: 16 December 2021
Counterpointe Sustainable Real Estate (CounterpointeSRE), a leading sustainable real estate finance company, announced today it has provided $18 million in financing to JBS Food USA secured by non-ad valorem tax assessments on a 425,000 square foot food processing facility in Plainwell, Michigan. Proceeds will be used to acquire and maintain an 8MW cogeneration system fueled by onsite biogas capable of providing 100% of the facility’s energy demands. As an approved capital provider in Michigan’s Commercial Property Assessed Clean Energy (C-PACE) program, CounterpointeSRE provided long-term non-recourse financing to JBS Foods USA, a subsidiary of leading global food company JBS S.A..
“JBS Foods USA is committed to a more sustainable future, and the CounterpointeSRE financing will help us meet our commitment to achieve net-zero greenhouse gas (GHG) emissions by 2040,” said Jim Mullin, head of energy procurement at JBS Foods USA. “By developing this biogas energy system, we are able to reduce our grid consumption, add resiliency to our site and reduce our carbon footprint.”
The owner-occupied beef processing complex consists of heavy production, packaging, warehousing, cold storage and service buildings on 425 acres. On location for over 95 years, the operations support the local community by employing 1,000 workers and partnering with 700 producers.
The combination of the biogas tax credits, PACE funding, and peaker-plant operational strategy will deliver economics that far exceed what is customary for these types of projects.
Promoting resiliency, reliability, and sustainability, the 8 MW biogas power cogeneration system designed and developed by Ally Energy is capable of meeting 100% of the facility’s 41.3 million kWh electrical load. The CAT genset (Caterpillar generators) will accept a blending of fuels from 100% biogas to 100% natural gas, allowing the plant to run in island mode or to accept power from the grid as needed.
First year utility savings are projected to be over $2.1 million with operations and management expenses included. Federal biogas ITC (investment tax credits), accelerated depreciation benefits and cumulative energy savings yield a projected savings of almost $52 million over the next 20 years.
“Because of Ally’s unique tariff expertise, we were able to identify maximum economic benefits,” stated Stephen Farrell, executive vice president at Ally Energy Solutions, the project developer. “The combination of the biogas tax credits, PACE funding, and peaker-plant operational strategy will deliver economics that far exceed what is customary for these types of projects,” he continued.
“We’re very pleased to align our financing behind such an impactful project from an energy and environmental perspective,” stated Eric Alini, Managing Partner at CounterpointeSRE. “This is a significant commitment by JBS to literally tap into an otherwise unutilized resource to the benefit of their bottom line, the environment and the community.”
In addition to the economic benefits, the project is projected to reduce greenhouse gas emissions by an estimated 24,602.13 MT CO2 annually. The waste-to-energy system converts methane and other gases that would otherwise be released into the atmosphere into a clean, sustainable energy source that reduces greenhouse gas emissions by displacing the need for fossil fuels. Such benefits are among the core reasons Michigan’s C-PACE program was developed as well as why markets such as Chicago, New York and states nationwide have adopted C-PACE programs in recent years.
JBS Foods is a diversified, global food company and the world’s largest processor of fresh beef and pork. The Plainwell facility has been in operation since 1918 and produces quality beef products enjoyed by consumers across the United States and around the world. This cogeneration project, with the ability to bring the Plainwell facility to Net Zero, aligns with JBS’ commitment to reduce greenhouse gas emissions in its operations by 30% by 2030.
What is PACE financing:
PACE financing makes it possible for owners and developers of commercial properties to obtain low-cost, long-term financing for energy efficiency and renewable energy infrastructure deployed in new or existing buildings. The program is based on legislation that classifies certain sustainability and resiliency projects as a public benefit. These green infrastructure elements, along with associated soft costs and all related work, can be 100% financed with no outlay of capital. The financing is repaid as an operating expense through the property tax bill at fixed rates over a term that matches the useful life of improvements, up to 30 years in many states.
About Counterpointe Sustainable Real Estate:
Counterpointe Sustainable Real Estate (CounterpointeSRE) is the leading commercial real estate finance provider specializing in sustainable infrastructure improvements. Since 2013, Counterpointe and its affiliates have financed commercial real estate construction and upgrades that have reduced annual electricity consumption by greater than 51,000 MWh per year and reduced water consumption by 23 million gallons per year.
Counterpointe Sustainable Real Estate