In Case You Missed It: Gevo's Virtual NDR Key Takeaways
Gevo management recently hosted a virtual non-deal roadshow (NDR), which can be accessed here. This included Chris Ryan (President & COO), Leke Agiri (VP, Finance), and Eric Frey (VP Finance & Investor Relations). For the NDR, Gevo management discussed a variety of topics and responded to Q&A from investors. Key topics included: (1) the development of the company’s sustainable aviation fuel (SAF) plant (Net-Zero 1) in South Dakota; (2) how the company’s supply chain will deliver value to airlines looking to reduce their carbon footprints; and (3) the latest progress on financing the project. Please see main body of this note for summarized management Q&A. Net-Zero 1 will produce SAF from corn and with a process powered by renewable energy. Gevo believes carbohydrates like corn are the cheapest and most scalable feedstock for SAF production. Net-Zero 1 is designed to have very low carbon intensity (CI) with low carbon feedstocks and energy efficient processes powered by on-site wind energy and green hydrogen. Management said that its airline customers care about their carbon footprints. Gevo’s process uniquely positions the company to deliver SAF that will provide a zero or even potentially negative carbon intensity (CI) score to its airline customers. Gevo’s process takes the entire supply chain into account. This includes starting with climate smart agricultural practices in the field to Gevo’s SAF production process, which utilizes clean power sources and how the fuel is eventually consumed. The company’s Verity Carbon Solutions tracking system monitors carbon emissions throughout the supply chain, allowing Gevo to produce SAF that meets airline sustainability goals at an affordable price. Gevo is working with partners and EPC contractors to develop Net-Zero 1 in a modular fashion. This reduces costs and will allow for rapid expansion to additional sites in the future. Gevo is currently in the financing stage for Net-Zero 1 and reaching conditional commitments and financial close is the number one priority of the company. This involves securing funding through a loan from the Department of Energy (DoE) and equity financing from private investors. Gevo believes it is on track to reach financial close by late 2024 or early 2025. All future financing will be done at the project finance level, not at the corporate level, according to management. Management said that the company’s progress with the DoE has led to an increase in the appetite from equity investors. In August 2023, Gevo was invited into the underwriting phase for a DoE loan (Title 17 clean energy financing). Management said it has a great relationship with the DoE and communicates on almost a weekly basis.Gevo is a low-carbon fuel company focused on the development and commercialization of renewable alternatives to petroleum-based products. In addition to serving the low-carbon fuel markets, the company can also serve markets for the production of chemical intermediate products for solvents, plastics, and building block chemicals using its technologies. The company's operating segments include: Gevo segment, which is responsible for research and development activities related to the future production of isobutanol; and Gevo Development/Agri-Energy segment, which is responsible for the operation of its production facility in Luverne, MN and the production of ethanol, isobutanol and related products.
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