Supporting the development of renewable district heating based on wood fuels in the Nordics

District heating, a promising solution in the energy transition

The global heating sector may not be in the spotlight, but it offers a substantial decarbonisation potential, as heat production is highly energy-consumptive and mainly relies on fossil fuels. District heating is one of the solutions identified to the heating shift. 
District heating consists in generating heat from a singular central source and distributing it to a number of individual buildings. A central boiler plant produces hot water that heats entire communities. Modern assets of this system are increasingly relying on non-fossil fuels and are a comparatively efficient mode of heating. 
By moving the combustion to a single place, instead of each house having its own boiler, the system can improve air quality. Being low-carbon, reliable, cost-efficient, flexible and offering a large-scale use, it proves to be a key instrument in the energy transition.

SolørBioenergi, a leading producer and supplier of renewable district heating in the Nordics  

Created in 2003, SolørBioenergi is a leading supplier of renewable energy based on wood fuels, with 900,000 users everyday - homes, businesses and industries - in the Nordic countries. The company’s core business is production and distribution of district heating, steam and electricity, energy recycling of impregnated wood – and production of biofuels in the form of pellets and briquettes. It owns and operates district 110 district heating plants and 175 local heating in Sweden and Norway.
By making use of the forest’s resources, SolørBioenergi’s district heating is generated from forestry and sawmills waste. Most of the fuel used for heat production is ‘virgin’ biofuel comprising treetops, branches, chips, shavings from sawmills and surplus roundwood purchased from local forest owners’ associations. The wood-derived biomass it exploits is mostly locally sourced and accounts for c. 80% of the company’s fuel mix.
SolørBioernegi intends to build a district heat production system corresponding to a zero-sum game: the plants emit no more carbon dioxide than is contained in the renewable fuel, while also allowing fossil fuel to stay in the ground. 
Operating in countries where the forestry is a large and important industry, SolørBioernegi invests in the value chain. It works with sawmills to help them get rid of their waste products in a sustainable manner. In addition, as Norway and Sweden’s forests are grown at a faster rate than harvested, SolørBioernegi also banks on the fact that the amount of biomass will continue rising.

Supporting the development of district heating based on renewable energy in the Nordics

SolørBioernegi Group achieved a sustained growth pace since its inception, on the back of organic growth and an active bolt-on merger & acquisition policy. The company recently completed a SEK 22bn (c. €1.94bn) long-term financing to help to refinance its existing debt and finance its future development.
Societe Generale acted as Mandated Lead Arranger and secured leading hedging roles: sole contingent hedge provider and sole market hedge coordinator. Our teams were able to deliver a full suite of solutions, across financing and hedging. In addition, SolørBioenergi benefited from our strong synergies and cooperative spirits, as other expertise within the bank , such as Market Activities for Fixed Income Currencies, were mobilised throughout the transaction. With this deal, Societe Generale cements its status as a leading partner in renewable energy financing across Europe.