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Prio in talks with two large PEs to co-invest in EUR 600m biofuels project – CEO

Prio, a Portugal-based energy group, is in talks with two large private equity (PE) firms to co-invest in a biofuels project valued at EUR 600m, CEO Emanuel Proença told Mergermarket.

The company is heading a consortium with a Portuguese industrial investor and a central European industrial investor, which the executive declined to name. The negotiations could lead to the two PE firms acquiring minority stakes in the consortium. He declined to reveal the breakdown of the consortium, although said none of the parties have a majority. Proença does not expect any new investors to join this investment until after it starts operating in 2026.

The plan is to build an industrial cluster for advanced biofuel production in the Port of Setúbal, whereby a hydrogen production factory, powered by solar and wind power, will supply energy to another factory that will produce Hydrotreated Vegetable Oil (HVO), the CEO said. HVO is a diesel-like fuel derived from processing renewable waste lipids.

This project will be partly financed under the EU Recovery and Resilience Facility, Proença said. He expects production to start in 2026 and declined to give a precise forecast of how much it will contribute to Prio’s revenue, noting he expects “hundreds of millions of euros”.

In 2022, Prio posted overall revenue of around EUR 1.5bn, the executive said. He declined to provide an exact EBITDA figure, though said it was between EUR 50m and EUR 100m.

Prio has three lines of business – biofuels production; fuel retail, where it sells conventional fuel and biofuels via its service station network; and electricity mobility, through its charging station network.

The company’s service station network is currently at 270, the CEO said, versus just under 250, when it was acquired by Spain-based independent energy retailer DISA in 2020. This growth has come from a mixture of acquisitions and newbuilds, the executive said. Prio is open to proposals of potential targets from advisers of individual service stations or chains that could be acquired, he added.

Two years ago, French retailer Auchan launched a process to sell its petrol station network in Spain and Portugal, as reported. Prio was one of the bidders that submitted a non-binding offer, according to market sources, though the process did not advance. Proença declined to comment.

Prio’s 270 fueling station network makes it the number-four player in Portugal with a market share of close to 10%, Proença said. Its charging station network gives it a 17% market share and its biofuels production gives it a roughly a 30% market share.

At the moment, Prio produces biodiesel, which is distributed to its service station network and sold to other players in the country, the executive said. Prio collects oil from domestic and industrial use, ranging from used cooking (olive and vegetable) oil to the waste derived from the olive oil, butter and margarine industries, he said. This biodiesel plant is located in the port of Aveiro and can produce 113,880 tonnes a year.

Prio is the largest producer of biofuels in Portugal and one of the largest European producers of biodiesel from residual raw materials, which has a very low carbon footprint and contributes to the circular economy, the CEO said.

Competitors in the biofuels space include the UK’s Greenergy and Argent Energy and Austria’s Muenzer, Proença said.

Prio also operates a liquid bulk terminal that can store up to 76,292m3 of diesel, petrol, biofuels, additives, slops and 648 tonnes of LPG, spread over 4 hectares of the Port of Aveiro, according to its website.

by Nelson Rodrigues