Enviva Partners announced that its sponsor’s previously disclosed 18-year, take-or-pay off-take contract to supply Sumitomo Forestry Co., Ltd., a major Japanese trading house, is now firm, as all conditions precedent have been satisfied.
Sales under the contract are expected to commence in 2023 with annual deliveries of 150,000 metric tons per year of wood pellets. Enviva Partners, LP expects to have the opportunity to acquire this off-take contract, along with associated wood pellet production capacity, as part of a drop-down transaction from its sponsor.
“Enviva and companies like Sumitomo Forestry are leading an energy transition away from fossil fuels in favor of renewable sources that can provide for dramatic reductions in lifecycle greenhouse gas emissions,” said John Keppler, Chairman and CEO of Enviva. “Notably, our off-take contract with Sumitomo Forestry, which runs from 2023 to 2041, has become firm as our customer was able to complete its project financing and lift all conditions precedent to the effectiveness of the contract even amid current volatility and uncertainty in global markets. With a notional value of nearly $600 million, we believe this contract is a vote of confidence in Enviva’s ability to deliver our product sustainably and reliably, even as many other industries and sectors experience significant instability.”
Enviva Partners, LP is a publicly traded master limited partnership that aggregates a natural resource, wood fiber, and processes it into a transportable form, wood pellets.
