Zenith Energy (LSE:ZEN) has agreed to acquire an Italian biogas project that is fully permitted, engineered and ready for construction, with the purchase price capped at €1.6 million pending confirmatory due diligence.
The Toronto and London-listed company, which has produced and sold natural gas in Italy since 2013 through its subsidiary Canoel Italia, said the plant will generate approximately 3 million cubic metres of methane a year for injection into Italy's Snam Rete gas network.
The project carries a long-term feedstock deal with a regional authority split roughly 50% municipal waste and 50% agro-industrial waste, addressing what the company calls the principal operational risk in biogas ventures.
Zenith projects annual revenues of approximately €5 million at full capacity, with EBITDA of roughly €2.5 million, a 50% margin underpinned by a 40% capital cost subsidy and a 15-year incentive offering a 20% uplift on methane sales.
The acquisition and subsequent development are expected to be funded through non-dilutive green project financing, mirroring the approach Zenith has taken with its Italian solar portfolio.
"The proposed acquisition reflects our Italian renewable energy strategy in action: acquiring high-quality development assets at attractive valuations and creating value by financing, constructing and operating them," said chief executive Andrea Cattaneo.
The identity of the target, vendor and project location will be disclosed on completion, which Zenith expects in the fourth quarter, with green financing targeted by the end of the third quarter and the plant operational by the third quarter of 2027.
News Intelligence what this means for the company
Zenith Energy is acquiring a fully permitted Italian biogas plant for €1.6 million, targeting €5 million annual revenue and €2.5 million EBITDA at full capacity, with first gas by Q3 2027. The deal extends Zenith's Italian renewable energy footprint beyond solar into biogas, funded via non-dilutive project financing rather than equity; it follows the July 2026 MoU to sell a c.50 MWp Piedmont solar portfolio for €12.0 million, signalling a shift toward monetising mature solar assets while deploying capital into higher-margin development projects.
The biogas acquisition is immaterial in scale—€1.6 million purchase price against a disclosed €54.7 million valuation of the solar pipeline as of March 2026—but demonstrates execution on Zenith's stated Italian renewable strategy and de-risks a key operational variable (feedstock supply via long-term regional authority deal). Non-dilutive financing preserves equity for shareholders, though the deal's impact on group returns depends on whether the projected 50% EBITDA margin materialises and whether project financing costs are favourable.
Insights assembled by AI. Editor-reviewed and grounded in tickstock’s coverage and proprietary knowledge graph.
Content is for informational purposes only, not financial advice.
