Idaho-based Sevana Bioenergy has sold most of its remaining assets in a deal with Berq RNG announced Tuesday, including the Rialto Bioenergy Facility in California after a little over two years of owning the facility.
This follows California Bioenergy’s announcement last week that it acquired Sevana Bioenergy's stake in South Dakota Biogas LLC, a joint venture created to build a network of dairy manure digesters in the state. The transactions leave Sevana with one remaining digester in Idaho, CEO Steve Compton confirmed.
Sevana was founded in 2017. In 2023, the Ontario Teachers' Pension Plan Board acquired a majority stake in the company and pledged $250 million to develop RNG projects across North America. By that time, Sevana had a track record of deploying more than 20 digester tanks across agricultural projects in Oregon, Idaho and South Dakota.
Meanwhile, the Rialto Bioenergy Facility faced difficult operating conditions in Southern California. The facility was designed by Anaergia and opened in 2020. At launch, it was touted as the largest food waste diversion and energy recovery facility in North America, with the ability to process up to 1,000 tons of organic material per day.
But the facility was built in anticipation of California's SB 1383 law going into effect, which would have guaranteed source-separated organic waste from residents in the Los Angeles area. Instead, RecycLA delayed enforcement of the law, and the facility struggled to receive feedstock.
In 2023, Anaergia spun off the facility into its own LLC, which filed for Chapter 11 bankruptcy. The company acknowledged financial difficulties due to its slow ramp-up, but committed to continue operating the facility during proceedings.
Sevana Bioenergy acquired the site out of bankruptcy for $20 million in 2024. The new owner announced that Anaergia would continue to operate the site, and disclosed plans to invest $5 million in deferred maintenance and other projects to enhance operations.
When the site first came online, Anaergia had sold organics extrusion machines to haulers WM and Universal Waste Systems. Since 2020, WM has operated its machine and sent the organic slurry to Rialto. UWS brought one of its machines online in the last few months, and is waiting for Los Angeles hauling contracts to be finalized before bringing its second machine online, according to Yaniv Scherson, chief operating officer at Anaergia.
The facility reached a peak run rate of 70% of capacity during Sevana’s ownership, according to Compton. He declined to comment directly on Sevana’s future, but said he was happy for Rialto’s new owners.
The facility’s gas offtake agreement with SoCalGas is still awaiting regulatory approval, which would further bolster the facility’s finances if approved. The facility has the capacity to produce up to 1 million mmBtus of renewable natural gas annually.
While conditions at Rialto are improving, the facility still appears to be operating at a loss, which may have created financial difficulties for Sevana, Scherson said.
“They bought a site that was not making money, and they probably had a budget of how much capital they were willing to invest until profitability,” Scherson said. “It must have taken longer than their plan.”
Despite the ongoing challenges at Rialto, Scherson noted there are still signs for optimism in the California organics market. RecycLA, the Los Angeles agency which oversees hauler contracts, is scheduled to phase in new contracts in the first half of next year that are expected to increase the diversion of food waste.
“That event should be a catalyst for more feedstock incremental to the market,” Scherson said. “But how much, of course, is speculative.”
Scherson said Anaergia currently plans to continue to operate the site with its new owners. Bas van Berkel, CEO of Berq RNG, said in a statement announcing the deal that the company looked forward to “applying our operating expertise to optimize performance at Rialto, working closely with the City of Rialto, our feedstock partners and the local community.”
Berq RNG is backed by Connecticut private equity firm Lotus Infrastructure Partners. Berq has previously developed and divested landfill-gas-to-RNG projects, and secured $110 million in bond financing in Michigan to develop four dairy manure digester projects.
