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Highland Pellets, Orion Energy to expand Arkansas wood pellet facility

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Arkansas-based Highland Pellets has entered into a $135 million (€111 million) strategic capital partnership with Orion Energy Partners to fund the expansion and upgrade of its wood pellet facility in Pine Bluff.

The partnership will also provide capital for additional long-term growth initiatives at the facility.

The plant is supported by a long-term contract with a major European power producer and, when complete, will be capable of producing up to 675,000 tonnes of sustainably sourced wood pellets annually.

Highland sources sustainable fibre resources for its wood pellets consisting of trees that are not suitable for the lumber market (due to size or quality), thinnings from crowded forests, and leftover material from local sawmills. The facility supports 90 full-time jobs and over 330 jobs in the adjacent forest industries and transport supply chains.

Highland Pellets supplies wood pellets for export, where it is used as fuel for renewable baseload electricity production at a converted coal power plant. The Pine Bluff facility was initially completed in 2017 and is currently undergoing equipment upgrades to improve operational performance and boost production capacity.

“Our partnership with Orion Energy puts us in position to become a top global supplier of sustainable wood pellets,” said Highland Pellets CEO, Tom Reilley.

“This transaction will allow us to scale-up our Pine Bluff facility and continue to execute our growth strategy. Orion Energy has been a collaborative capital partner and was able to execute the transaction in an uncertain market backdrop with speed and efficiency. We look forward to growing our platform with the Orion Energy team.”

Ethan Shoemaker, investment partner and head of the Houston office for Orion Energy, said: “We are pleased to partner with Highland to expand the Pine Bluff facility and provide a sustainable fuel source to support the global renewable fuels market.

“Tom [Reilley] and his dedicated team have worked relentlessly to execute their plan and we are excited to collaborate at this transformational stage.”