ARTICLE: Aries Clean Energy Receives $25 Million Commitment of Project Equity from Spring Lane Capital


Biofuels Digest

Publication Date

January 14, 2018

Aries plans to use the proceeds from the investment to deploy an immediate pipeline of customer-ready projects using their proprietary waste gasification technology

By Helena Tavares Kennedy

We dreamed of the day waste projects would get the funding needed to gain ground, and that day may have finally come.

One of the most remembered parts of Dr. Martin Luther King Jr.’s “I have a dream” speech is when he said “I say to you today, my friends, that in spite of the difficulties and frustrations of the moment, I still have a dream.” We have heard many leaders in biofuels and biomaterials say the same thing as they overcome obstacles and challenges with financing, laws and regulations, market busts, and unforeseen trials and tribulations.

Today, we remember Dr. King and how he never gave up fighting for his dream, with a renewable energy project that could be making dreams come true in a different way.

In Tennessee, Aries Clean Energy issued approximately $21.4 million of new equity led by existing investors and received additional capital commitments from Spring Lane Capital of $25 million for equity in future gasification projects. Proceeds from the offering will be used to fund project development, retire debt and other general corporate purposes. Spring Lane Capital is a private equity firm focused on project finance investments for smaller-scale solutions in the energy, water, food and waste industries.

Aries plans to use the proceeds from the investment to deploy an immediate pipeline of customer-ready projects using their proprietary waste gasification technology, as well as to accelerate business development in new markets within the U.S, increase efficiencies in current products, and advance growth outside the U.S. borders.

Why the big deal?

The financing marks a significant milestone for the emerging set of municipal and industrial-scale solutions providers in the waste management industry, which has been historically challenged to access affordable financing tailored to the needs of sub-utility scale projects in the industry.

“I am pleased that Spring Lane Capital has recognized our award-winning, patented clean energy technology and wants to help share these solutions with more cities and industries,” said Gregory L. Bafalis, CEO of Aries. “Their model of financing distributed scale solutions is ideal for our business as we look to develop and operate a series of small-to-mid scale plants.”

“Aries Clean Energy is poised for growth, with a leading and proven technology, a wide-open market opportunity, and an experienced, high-execution management team,” said Nikhil Garg, General Partner at Spring Lane Capital. “This financing gives Aries the runway to accelerate the business and deploy their solution at scale while providing strong economic benefits to their municipal and industrial customers.”

Spring Lane Capital addresses some of the fastest growing segments of the energy, food, water and waste markets that more traditional forms of capital cannot work with at scale. The clean energy and waste/wastewater systems of Aries reduce greenhouse gas emissions and provide other economic and environmental benefits for the communities around each of its plants.

Garg continued, “We believe in the long-term social and economic benefits natural resource efficiency brings to everyone. My colleagues and I are pleased to support Aries Clean Energy as it pushes forward to take its technology across this country and overseas.”

From algae to waste

Some of you may remember CEO Greg Bafalis from Aurora Algae, which had an unfortunate ending and auctioning off of its assets back in 2015 as reported in The Digest. While algae didn’t work out, waste gasification technology seems to agree with him much more.

Aries’ latest project is the Lebanon Gasification Initiative in Lebanon, Tennessee. At full capacity, this plant annually will keep 8,000 tons of waste from landfills and eliminate 2,500 tons of carbon emissions from the air. The syngas converted from waste can generate 1.8 million kilo-watt hours of electricity in a year. That’s pretty significant and definitely promising.

As reported in the Digest in April 2017, Aries Clean Energy had a name change to reflect a shift to renewable energy technologies. What was formerly PHG Energy was renamed Aries Clean Energy to reflect the evolution of the clean energy and sustainable waste disposal company. Eight patents have been granted to the company for innovations in the gasification field. Most of those already have been deployed successfully in projects for both industry and municipalities, cleanly converting a mixture of wood waste, biosolids and scrap tires to electricity.

“The old name, PHG Energy, worked well for us when we basically offered industrial fuel gas conversion equipment,” said CEO Greg Bafalis. “Aries Clean Energy is a brand that much better represents what we do today as well as our product line and focus going forward.”

“Our downdraft and fluidized bed gasification projects have proven themselves viable with over 50,000 hours of commercial operation,” Bafalis added. “Putting these clean and sustainable energy innovations to work in more locations, and bringing some of our latest research and development efforts to the marketplace this year are going to be exciting steps for us and for the industry.”

They also have tapped into strong people with the necessary experience to get their project moving forward. As reported in The Digest in May 2017, Aries tapped Ben Gardner as vice president of engineering to direct all efforts in design, construction, and operations, as well as the company’s ongoing research and development programs.

“Ben’s experience in taking companies from early stages of development all the way through to commercialization will be invaluable to executive management and to our engineering teams,” Aries CEO Greg Bafalis said. “His previous work with fluidized bed gasification is especially important to us, and Ben brings a waste conversion and green energy knowledge base that is rare to find even in a global marketplace.”

Applauds and awards abound for Aries

All their hard work is paying off in terms of awards and recognitions as well. In May 2017, Aries Clean Energy’s biomass gasification plant just outside Nashville was recognized as the driving force behind the City of Lebanon’s receipt of a 2017 Governor’s Environmental Stewardship Award, the most prestigious conservation award in Tennessee.

Within 30 days of that news, the same gasification plant received recognition as a sustainability success with the Environmental Leader Product & Project Award. The award is national in scope from a leading environmental publication and named the facility a 2017 Top Project energy category winner.

Environmental awards aren’t the only kind of accolades Aries has been receiving lately either. In October 2017, the downdraft gasification plant in Lebanon, Tennessee, was the catalyst in two outstanding award programs. The Greater Nashville Regional Council (GNRC) presented the 2017 Local Government Award for Public Works & Utility Infrastructure to the City of Lebanon on Sept. 27. The GNRC recognized Lebanon for Solid Waste Management and Environmental Stewardship through the city’s gasification initiative, its use of public/private partnerships, and the city’s other energy-saving and recycling programs. The Industrial Water & Wastes Digest also included the renewable energy plant in its list of top projects for 2017.

In November 2017, the Lebanon Gasification Initiative received the 2017 project of the year honors from the Tennessee Chapter of the American Public Works Association (TCAPWA). This award recognizes a project in a Tennessee city that epitomizes outstanding planning, construction, and management. At the heart of the Lebanon initiative is the world’s largest downdraft gasification plant designed and built by Aries Clean Energy.

“This kind of recognition echoes how much teamwork it takes to build and implement a project like this,” said Gregory L. Bafalis, CEO of Aries. “We are pleased to bring the technology and expertise to this renewable energy plant. That combined with the support of the city public works team has made for a great partnership.”

Indeed, even Mayor Bernie Ash applauded Aries and said, “I’m pleased to say that with the detailed planning initiated by Aries, construction and implementation have progressed very smoothly. As with any power plant, we’ve had some bugs to work out, but overall, it’s been a great team-building experience.” Mayor Bernie Ash says tackling the solid waste issue is best done taking one step at a time. He sees this renewable energy plant as the first step toward a total MRF (material recovery facility) line for the city’s waste.

Bottom Line

If there is one thing we’ve learned from being in the biofuels industry, it’s that it’s never too late to rise from the ashes and you should never give up on your dreams. Aries Clean Energy is doing just that – it’s making progress and realizing its dreams of renewable energy projects that can be innovative, successful, profitable, employ people, and good for the environment. Spring Lane Capital and existing investors are helping Aries with their financial backing making it a true team effort to make their dreams a reality. We think Dr. Martin Luther King Jr. would be proud. After all, he said, “We cannot walk alone. And as we walk, we must make the pledge that we shall march ahead.”

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