Canada Growth Fund Announces Strategic Investment in Entropy Inc. and Carbon Credit Offtake Commitment - Seite 2

"Entropy is excited to partner with CGF in re-establishing Canada as a world-leading CCS market," said Mike Belenkie, President and CEO of Entropy. "By creating a large-scale CCO to guarantee long-term carbon pricing and adding $200 million to our existing Brookfield funding for third-party projects, Entropy has a clear path to accelerating growth and reducing emissions, right here at home. While we will remain a global CCS developer, we believe our projects are likely to advance much more quickly in Canada than any other country in the world."

In March 2022, Entropy announced a strategic $300 million investment agreement with Brookfield, via the Brookfield Global Transition Fund, to scale up the deployment of Entropy's CCS technology globally. Today's announcement builds on this strong foundation and provides greater revenue certainty to accelerate Entropy's major investments in Canada.

"Carbon capture and sequestration is a vital technology for reducing emissions in carbon intensive sectors" said Jehangir Vevaina, Managing Partner and Chief Investment Officer for Renewable Power & Transition at Brookfield. "Our investment agreement with Entropy was designed to accelerate the deployment of this important technology in Canada and worldwide. We welcome the additional capital and revenue certainty that the Canada Growth Fund is providing to enable Entropy's success."

Transaction Highlights

Definitive agreements between Entropy and CGF to accelerate the decarbonization of hard-to-abate industries in Canada;

CGF to invest $200 million in Entropy for the development of Canadian CCS projects and for corporate purposes which, once fully drawn, could result in CGF owning approximately 20% of Entropy;

Brookfield will continue to invest the balance of its existing $300 million hybrid security into the business, by which point it would be the largest shareholder and control Entropy;

CGF to provide the first ever large-scale, long-term, fixed-price CCO in a compliance carbon market, committing to purchase up to one million tpa of carbon credits for 15 years;

The initial allocation of CCO commitment will allow Entropy to proceed with its Glacier Phase 2 project, targeting the sale of up to 185,000 tpa of Alberta TIER carbon credits at an initial price of $86.50 per tonne for a term of 15 years;

The balance of the remaining CCO will be available for Entropy to underwrite additional third-party projects on similar terms in Canada;

Post-investment, Entropy will have approximately $460 million of capital available which, together with investment tax credits, carbon capture incentives and project financing, establishes a path to execute over $1 billion of CCS projects and abate more than 1 million metric tonnes per annum ("MMTPA") of emissions, with a focus on the Canadian market.