Canadian carbon-capture project developer Entropy has secured additional funding from Canada Growth Fund, in a deal similar to its previous investment from Brookfield Renewable Partners. The C$200 million ($150 million) investment from Canada Growth Fund also includes a fixed-price carbon credit purchase agreement of up to 1 million metric tons per year.
This transaction marks Canada Growth Fund’s first foray into Alberta’s carbon market. The public fund, with a total value of C$15 billion, was established by the Canadian government to support businesses and low-carbon projects and technologies. Once the investment is complete, Canada Growth Fund could own approximately 20% of Entropy.
In early 2022, Entropy secured a strategic C$300 million investment agreement with Brookfield to fund the expansion of carbon capture and storage projects. The new investment from Canada Growth Fund will be made through a hybrid security, similar to Brookfield’s agreement but with a revised valuation. Both investors will contribute funds simultaneously. With this investment, Brookfield will remain the largest and controlling shareholder in Entropy.
In addition to the financial investment, Canada Growth Fund has committed to purchasing up to 600,000 tons of carbon credits from Entropy projects over a 15-year period. This commitment has relieved Entropy of the carbon-pricing risk and allows the company to proceed with the second phase of its Glacier project.
Entropy’s Glacier Phase 1 project, a commercial natural-gas-fired facility for capturing and storing carbon, has been operational for approximately 18 months.