Hi, everyone. This is Victoria from Adelaide Capital. Thanks for joining us today. Thanks for joining the EverGen Infrastructure Corp. Q4 and Fiscal Year 2022 Earnings Call. With me today I have CEO Chase Edgelow, COO Mischa Zajtmann, as well as CFO Sean Hennessy. The team is going to be running through a brief presentation, and then we will open up the floor to any Q&A. There is a Q&A box at the bottom of your screen. If you do have a question, you can type it in there, and we will get to it at the end of the presentation. I would like to remind everyone that the presentation may include forward-looking information, and you can refer to the disclaimer for forward-looking information in the end of MD&A as well as in the presentation itself.
With that, I'm going to pass it over to Chase.
Great. Thanks, Victoria. We'll just put slides up on the screen here. Start running through the presentation. Great. Hopefully everyone can see this now. Just for a brief introduction for anybody who's new to EverGen or new to joining our calls. We're a renewable natural gas platform that was established to be a developer, owner, operator, and consolidator of renewable natural gas infrastructure in Canada. Really what that's, you know, what that means is we operate facilities that take in three types of organic waste: manure or agricultural waste, commercial food waste, and residential food waste. We process that. We capture the methane emissions, so we're carbon negative, and we sell that methane as renewable natural gas to utilities like FortisBC. That's the basic business model. We're now established with owned assets in three regions across Canada.
We're a leading consolidator in the space, and we're in the middle of construction on two projects which we'll talk about, which will take us to 240,000 gigajoules and CAD 8 million-CAD 10 million of EBITDA. Those will be done construction as we at the end of Q2 this year, and then, we've got a funded portfolio of projects that then take us to 420,000 gigajoules. We're fully funded. We've got excess liquidity of CAD 25 million of undrawn credit facilities, our existing balance sheet and free cash flow to fund us forward. Finally, like what we're really excited about is the opportunity in the space. W e're in the early innings of the renewable natural gas build-out.
This is one of the few drop-in fuels that lead the energy transition and is highly sought after, and we're seeing a number of tailwinds that are gonna lead to explosive growth for our company. In terms of this call and looking back on 2022 and Q4, there was a number of milestones that we achieved. One that we announced earlier was the CAD 31 million credit facility that we put in place with Roynat's subsidiary of Scotiabank and Export Development Canada. That facility builds on an existing credit facility that we had with Roynat's, which is about CAD 6 million drawn, as Sean will touch on that in a minute. Funds the execution of the projects under construction as well as our growth projects.
The second major milestone for us was really moving from a developer and operator to also a constructor of these projects. We commissioned our GrowTEC expansion, our phase one RNG expansion project, and we'll touch on that as well as we move forward through the presentation. Looking forward, we'll come back to the milestones that we see in the upcoming months, but there's a number of key milestones that are gonna be game changers for our company as we move through the following months in the next quarter. I'll turn it over to Sean Hennessy, who is our CFO, to walk through our Q4 results.
Great. Thanks for that, Chase, welcome to everyone to our Q4 and Year-End 2022 update call. In Q4, we announced breaking ground at Fraser Valley Biogas for the expansion project, there's been a shift in management's focus into the execution of the project while at the same time managing cash flows from our existing operations. During the quarter, we continued to progress our investments into both Fraser Valley Biogas and to Pacific Coast Renewables, formerly known as Net Zero Waste Abbotsford, with approximately CAD 3.7 million of CapEx invested into those facilities, split almost evenly between the two. We ended the year with a strong cash position just shy of CAD 9 million.
As Chase touched on previously, in January of this year, we announced a CAD 31 million debt facility, which provides for additional liquidity of CAD 25 million. We expect to start drawing on this strategically during Q2 2023 to fund our Fraser Valley Biogas expansion project. Another milestone that I want to touch on is the insurance. During our call in Q3, we gave some guidance on where we expected to land with insurance, and we were successful in negotiating the settlement of certain of our insurance claims towards the end of Q4. At year-end, we recorded a receivable of about CAD 1.75 million, and during Q1, we received CAD 1.55 million of insurance proceeds. There's about CAD 200,000 outstanding from the claims at year-end.
This was a favorable outcome for EverGen, as I touched on previously, it's, you know, came in above what we previously guided. We still have a couple of claims open for both facilities relating to our property damage. The advice from our insurers was to keep these open for the term of that we're insured, that we're allowed to make claims for, which is two years from the floods, a nd for Q1, we're not seeing any material expenses come in to date. It's less than CAD 100,000 of R&M expenses, which we would expect to settle towards the end of the year. Moving on to revenue. In Q4 2021, revenues were unseasonably high.
That was as a result of the influx of organic waste as a result of the floods in during the end of 2021 to our processing facilities at both Sea to Sky Soils and Pacific Coast Renewables. Q4 is more run rate. We're seeing an increase in tonnages coming into some of the facilities, and we expect to continue to build on those tonnages and increase the amount of organic waste that we're taking in because we still have capacity at some of our facilities. I mean, the key point here as well is that the reduction in revenue was really offset by a reduction in operating costs and G&A.
Obviously, with the floods in 2021, we had high R&M costs, which we didn't incur during Q4 2022. We're seeing our G&A start to come down now as we've been building out the team, the in-house team, rather than a lot of outsourcing to consultants. Moving on to the next slide, please. Here what we're trying to get across is that after fully funding our projects at both Fraser Valley Biogas and GrowTEC, we expect to have excess liquidity of just under CAD 7 million. Following the completion of these facilities, we still have CAD 16 million of debt facility of undrawn debt facility available for funding the Pacific Coast Renewables upgrade project.
We're still expecting to receive grant proceeds on which we should be able to make an announcement or provide further clarity on at a later date. obviously, once GrowTEC phase one and Fraser Valley Biogas phase one are operational, we're going to see a substantial increase in operating cash flows through tripling our gas production and almost doubling the capacity that we can take in in organic waste across all of our facilities.
I think in summary, the, you know, the year ending 2022 was really a setup year for us, getting prepared for the build-out and construction that we had towards the end of the year and, you know, we'll have through Q1 and Q2. Obviously, as we have built out capacity that's significantly increased from our historical operations, there's two, you know, effects to that. One is, obviously our EBITDA will step up, but we'll also have a flatter base of renewable natural gas production, so less seasonal variability versus previous years. That's really the. The focus of the team is delivering GrowTEC and Fraser Valley Biogas, which is on track and on budget.
I think the key there again is that once fully ramped up, we've got CAD 8 million -CAD 10 million of EBITDA capacity just from the assets that'll be done construction in Q2. where that looks relative to our current valuation or market cap, CAD 47 million, with a net debt position of, you know, net cash about CAD 3 million, so CAD 44 million enterprise value on that CAD 8 million -CAD 10 million of EBITDA just from the phase I of build-out, versus where we're seeing single assets transact in the, you know, 10-12x range. A significant price upside just after achieving our first couple of milestones this year, then we think a ton of upside beyond that.
I think at this point we've, you know, we've covered the historical results. We'll spend a bit of time just updating on the rest of the business. You know, I think what's really important right now has been with the increased focus on the energy transition, you know, some of the shine coming off of new technologies or the hype around hydrogen, as an example. What we've seen is a lot of interest in renewable natural gas from utilities. When we first IPO'd, we talked about the gold standard offtake agreements that Fortis was supplying in the space, and that we expected to see the same thing from other utilities.
We're now seeing that, you know, a year and a half later, a number of large utilities are competing head-to-head as well as end users that need to decarbonize are signing long-term offtake agreements as well for renewable natural gas, a nd all of that is a significant tailwind for our future projects. In terms of other tailwinds, maybe, turn over to Mischa Zajtmann, and we can talk through some of the other tailwinds in the sector.
Yeah, definitely. Thanks, Chase. I mean, I think what's kind of happened in the last twelve months is we've had a lot of positive momentum in the space in general. We've seen increased diversion, organics diversion from landfills, which has had a positive effect on tipping fees for the organic waste that we've received, which essentially is the energy source that drives our business. As Chase mentioned, we're seeing similar positive effects on the offtake side as well. South of the border, there's been a lot of momentum with the Inflation Reduction Act and the tax credits associated with that.
We're actively looking at projects over the border, and we expect positive results from those initiatives as well. In Canada, we're continuing to pursue a lot of grant funding opportunities. We expect that although the recent budget announcement didn't include an IRA equivalent tax credit for biofuels and biogases, there was a mention that it'll be considered and prioritized in future readings. You know, the industry as a whole, I know the Biogas Association is pushing hard and lobbying hard for biogas' inclusion in the next budget, and we remain bullish on that front as well.
You want to keep going on the current portfolio?
Yeah. As far as where we're at today, you know, we started out as sort of a local, lower mainland of Vancouver-focused platform with our three projects in British Columbia. We've now expanded, essentially created a national platform in Canada, which is really exciting for us, obviously, with GrowTEC and our Project Radius acquisitions. We're also looking closely at projects in Quebec, additional opportunities on the prairies. you know, there really is a lot of runway to get to that sort of near-term goal and target of up to 2 million GJ per year of RNG in our portfolio.
Yeah, I think Mischa's maybe downplaying a little bit. I think we've been really successful at consolidating in the space relative to others. We've now shown that we can, you know, take existing facilities, expand them, upgrade them effectively, and I think that, you know, that's really a valued skill. A number of the projects that we see are in what we would say close to last mile of development. There's been a couple of smaller developers that have been working to get a project up and running for a couple years. It still needs significant design work, so that's where we come in, and then from a funding perspective, providing capital to smaller developers that are near the finish line.
What that does for us is it gives us projects like Project Radius that are well advanced and we're able to get into for a very reasonable acquisition price, and that drives long-term value creation. In terms of the current operating portfolio, as I think we've touched on the expansion plans, Pacific Coast Renewables. You know, key here is really as we move forward, and we've applied for a significant quantum of grant capital here. I think that will be a real catalyst, a positive result from grant funding towards that project will be a real catalyst for us, and we'll provide an update on the development timeline associated with PCR at that time. Fraser Valley Biogas, we've made significant progress on construction, 60% complete.
With that, you know, I think what we've seen is there's been a number of opportunities for us to optimize the project as we go through, template our process so that as we're expanding other facilities, you know, that process is the same. From a completion standpoint, we now have all of the equipment. The major pieces of equipment are either on-site or at fabrication shops, substantially complete. We've got piping that is being completed and ready to ship that will be flanged together on-site, and the majority of the civil work has been completed on-site. That project from our perspective, is on track for a Q2 completion, and we'll then move into producing expanded RNG volumes.
GrowTEC, I think has been, you know, a real success story in terms of coming in and being able to get access to an operational facility, but also step right into an improvement project. There, with commissioning that we completed in Q1, moving into production in Q2 and ramping up production is the goal with the phase I and our focus. We've got an expansion project phase 2, which will expand the facility to 140,000 gigajoules that we're working on engineering. It's in the engineering phase at this point, and we'll have an update later this year.
Sea to Sky Soils, finally, you know, I think our strategy has always been to have a hub approach to facilities, so to be regionally impactful to the feedstock market where we're working with municipalities and commercial waste, organic waste suppliers or producers that are looking for processing. There, we've been successful, and we talked about in our press release an additional 10,000 tons of additional contracts that we've won there. I think, you know, key message there is that we're working hard to build out our capacity as quickly as possible. There still remains a significant gap in region for processing infrastructure that's of the quality that we're building at Fraser Valley, Sea to Sky Soils, and Pacific Coast Renewables.
When you sum all of those projects together, the 4 projects on the previous page, that, you know, that is our core expansion project EBITDA of CAD 13 million. We've got incremental RNG upside, which is from incremental volumes, but also taking advantage of the spot market pricing that we're seeing. That's an incremental EBITDA upside from the built-out infrastructure that we'll have at our 3 core projects. Incremental organics processing upside is similar. You know, we benchmark our EBITDA projections on a utilization factor in the facility that has incremental upside, so we can take in additional organics, as well as take in spot tons when there's events like the flooding events that we had previously. There's been animal fatalities that need to be processed.
You know, those types of spot tonnages can be really lucrative, so we want to leave a buffer in our facilities to take that type of waste. Then where our focus has been in terms of future growth is on the incremental near-term pipeline upside. We'll touch on that as it pertains to our projects pipeline and Project Radius. From a multiple perspective, this is, you know, this is based on some of the peer trading averages and as well as some of the transaction multiples. What we've also seen is, you know, significant multiples paid for single assets in Canada, and that, you know, that's really what we're focused on delivering, is a portfolio of low-risk contracted assets that deserve the multiples that you see on this page.
That really drives a re-rate in valuation as we bring those assets online. The other, you know, the other interesting story from our perspective when you look at the market, there are a number of the players, have been, you know, have pursued a private model or where they are public. You can see anybody that's got significant EBITDA. EBITDA starts to have a really attractive multiple and a large-scale portfolio. With our line of sight to CAD 13 million of EBITDA from our core projects, we're moving into the, you know, haves, the, you know, where you've got substantial EBITDA and large-scale valuations that are applied to these types of platforms that, like the platform that our team has built at EverGen.
One important step in that, in our project pipeline that we mentioned earlier was Project Radius. Project Radius was a smaller developer working a project, base project that we farmed into, or we acquired a 50% stake in last year. It added a new jurisdiction for us in Ontario, you know, part of our strategy of moving and consolidating across Canada. At the time that we acquired our 50% interest, the project was, you know, in that last mile of de-development. There needed to be about CAD 1 million, a million and a half dollars spent on detailed engineering to get to cost certainty and take the project to what we call final investment decision or so it's ready for construction.
We've now completed that step. We've engaged an advisor, Northeast Renewables LP, our partner, to secure project-level debt and equity for this project. We think there's going to be really strong interest in that. Expect to have an update for the market towards the middle of the year, early Q3, where we can talk a little bit about what that looks like. Based on what we've seen with other developers that have projects similar to Project Radius, we're seeing, you know, CapEx being 100% carried. We're seeing operators like EverGen that will remain as the operator on the facility and get a carried interest in the back end.
I think that's our expectation here, is that we're gonna remain involved in the project, but our funding will be supplied by a larger party that's really looking to get access to an RNG project. I think this, you know, this is just a real high-level version of what we've seen happening in the space. I think with 2021, you know, we were one of the first companies to go down the public path.
You know, I think part of the reason for that is we really believe there was an ability to consolidate smaller projects that way. We raised about CAD 60 million of equity at the same time that others went public, and there was a number of equity raises, and the larger players were just starting to look at the space. I think Fortis was obviously providing offtakes and was very supportive of the RNG sector. It was probably just a learning phase for a lot of the other strategics and utilities in 2021. That really shifted towards the end of 2022 and into 2023. We've seen a lot of consolidation, a lot of investment by larger entities into smaller, more nimble, RNG-focused platforms like EverGen. Really, I think the rationale for that is these are relatively small projects.
They involve gas production, but it's renewable gas production, and it's derived from waste. It's a real different business to what they traditionally operate. Their choice, entry into the market has been through acquisition or through partnerships. With that in mind, our initiatives to continue to add projects, grow our pipeline, continue to be a real focus for us. Adding jurisdictions, as Mischa talks about, both across Canada, but also looking at select projects where we've got a competitive advantage in the U.S., is part of that. I think, you know, simple math on this is our initial build-out of GrowTEC and Fraser Valley take us to just under a quarter million gigajoules per year.
All of our core projects, including the phase I of Project Radius, takes us to north of 1 million. Just what we have in our near-term pipeline is a 2 million gigajoule per year growth profile. That's the CAD 50 million-CAD 60 million of RNG revenue if we're converting all of those projects. There will be projects that we don't convert into operation, but we've got a number of other pipeline projects behind those that we would advance the highest quality projects to that phase. From an ESG perspective, I think we've covered this in a lot of different ways. We're a company that's dedicated to solving two key problems that we think will change the future for Canada, both from a waste perspective and also from an energy usage perspective.
I think I want to leave a bit of time for questions. I know we've gone a little bit over from what we were hoping to do. Mischa, Sean, and I are available as well if there's any follow-up questions that don't get answered on the call. I'll turn it back over to Victoria.
Thanks, Chase. Quite a few questions. Let's just start at the top and get at them. First question, can you provide additional details on the GrowTEC phase two expansion? What is the incremental EBITDA expected to be generated, cost estimate, and anticipated timing of completion?
We're currently undergoing our front-end engineering and design for phase two. At this point, there's not a lot of additional information to provide there. Our target is to add about CAD 2 million of incremental EBITDA net to EverGen. From a CapEx standpoint, it's, you know, it's too early to come up with an update there. Our expectation is that we'll complete that engineering work and be able to provide an update towards the end of Q2, early Q3. With that, we'll be moving very quickly into construction.
Okay. Any update on when you expect Pacific Coast Renewables to be permitted?
On Pacific Coast Renewables, I think our permitting team that we established after the flooding events and the delays that we saw there, has been really successful in getting us in front of regulators. There's still no, you know, no better clarity on when we expect to receive that update. I think we will provide an update around the grant funding outcome as well. That should provide more clarity there. I think it's safe to say at this point, though, that we're looking at construction from our perspective in 2024, and that EBITDA contribution will be in 2024.
What regulatory approvals remain outstanding specifically before construction can begin? Is there any prep work you can do today that would help shorten the construction timeline later?
Yeah. Mischa, do you wanna touch on that side?
Yeah. In terms of the regulatory approvals, a lot of that work is in process. The primary one is getting the Ministry of Environment approval. Then, concurrent with that, we're looking to get city approval, which we're getting in front of the right committees, and it's more so just like an administrative log jam within the city that we're waiting on there. All of our dialogue and feedback with the city has been positive. Then the last step is getting ALC approval. ALC approval, that's the Agricultural Land Commission. That approval should follow lockstep with city approval.
The city of Abbotsford has like an agricultural committee, and their sole purpose is to sort of be a gatekeeper for the ALC so that whatever they recommend and present to the ALC is sort of in line with something that they should recommend. As far as the advanced work, the advanced construction, we are doing some advanced construction there. We've done some concrete bunkering to our facility to ensure that we're operating at the highest standards of compost operations. We've also done some work on wastewater treatment there in advance of our RNG development.
I think part of the rationale for the name change as well is really differentiating our facilities in the Lower Mainland, in and around Vancouver, for those that are not from the region, from others, from, you know, the substandard facilities that take some of the waste today. It's, you know, it's an exercise that in combination with where we land on grant proceeds and what Mischa has mentioned on the existing infrastructure upgrades that we're doing in advance of the project, we expect to be able to put forth a really strong project relative to what we're seeing in the space for waste management and processing options. We're trying to position the facility to be very competitive long term and strengthen the contracted profile of the feedstock at the same time.
I think a lot of, a nd sorry, just add one thing there. Some of the perceived delay around that project, I think has given us the opportunity to really reset relationships with the Minister of Environment and the city. I think now, I know that the Minister of Environment considers us almost like a poster child in the region for compost operations, which, you know, took some work. I think a lot of that goes to our team. The city of Abbotsford has become very, very supportive of this project and a bit of a champion for us.
I think that they sort of see the vision, they see the opportunity to sort of create this kind of energy park in the region and that no one else has right now. I think although we've had some delays at this project from a permitting perspective, we're on a much better footing. Long term, I think it'll be beneficial to the project and the company as a whole.
Could you please elaborate on the potential need for additional digestate storage at Fraser Valley Biogas? What would determine if you needed to do this, and when would you likely know?
This, this is really around, you know, what is an operating cost for hauling digestate and storing digestate off of site and transferring that to a capital investment that lowers the OpEx for us and allows us to increase volume. This is, this is something that I believe, Sean, we're targeting a decision Q3 or Q4. If, you know, if we move forward with that, it's to maximize EBITDA, long term.
Could you provide thoughts on the pricing for tipping fees right now for feedstock, both on a spot basis as well as on long-term contracts?
I think we touched on this a bit, but we're seeing a lot of positive momentum on the sort of where feedstock pricing and tipping fees are trending. In Ontario, you're getting contracts secured, long-term contracts secured at north of CAD 150, CAD 160 a ton. We're seeing a similar dynamic, not quite that high pricing in BC, but we're seeing a similar dynamic in terms of more waste, more organic waste and less contract or permitted facilities to receive that waste. For example, in Abbotsford, our contract is due for renewal imminently here, we expect that pricing will be reflected accordingly.
Okay. On the RNG side, would you be able to provide an update on pricing that you're seeing in the spot market as well as what you're seeing for long-term contracts, and if it's continuing to trend higher?
Yeah. I think we touched on this a little bit. The, you know, the original market was, you know, somewhat set by Fortis's long-term contracted market set by Fortis's contracts and the BC Utilities Commission's price caps associated with that. You know, that for a long time, that was CAD 30, stepped up a little bit and I think steps up again on April 1st for new contracts. That, you know, that sort of long-term utility offtake option, depending on the project and depending on the carbon intensity with someone like Fortis, has continued to escalate. You know, we see similar things in Quebec as an example. I think they've announced they're capable of paying anywhere from CAD 25-CAD 45 a gigajoule for gas.
You know, I think in both cases, pipeline connected in North America, so, you know, projects can sell into different markets regardless of geography, with some logistics involved. Regardless of geography, you can sell to different utilities across North America. The, the Californian market, the sort of spot, you know, market that was based on LCFS and RIN pricing, has come off quite a bit from last year. That's really based on the nature of that carbon market and a supply demand imbalance that they have. There's only so much gas that can be sold in California, and it's capped. It's a capped mechanism.
That, you know, that market is probably the one that's come down versus all the long-term contract markets that we focused on, have continued to escalate, in order to. You know, they're competing head to head for projects like ours to deliver gas. We're seeing not just utilities, but strategics, offer long-term contracts with pricing floors that are north of CAD 25 a gigajoule, in some cases higher than that. You know, I'd say that's probably up 20% or 30% from 2 years ago.
Okay. Would you be able to speak to the type and size of projects you're looking at in the U.S., and how advanced these projects are?
Yeah, I'll touch on that. I think, you know, at any given time, we've got a number of BD activities where we're pursuing both greenfield development projects and the last mile development partnerships with smaller developers. I think we've got a handful of discussions that fall into those two buckets on projects in the US. Where we wanna compete in the US is, you know, away from the traditional markets. The capital that was raised in 2021 in the US for US projects was focused on delivering projects that could take advantage of really high LCFS and RIN pricing, and those types of projects were typically dairy farm projects, so very specific and a lot of capital, a lot of platforms are really focused on dairy projects.
We've always, I guess, more interested in mixed waste projects 'cause you've got a diversified feedstock, you get some tipping fees. That tended to lend itself to working with the utilities on long-term contracts versus trying to take advantage of the spot market. Because of that, our focus in the US has been projects that don't fit into the LCFS and RIN market as well, where we've got a competitive advantage with Canadian offtakers to, you know, come in and develop a project in a way that a US counterparty might not be able to, you know, have the same access. Secondly, the skill set of doing a mixed waste digester project is different than a dairy digester project.
Applying our knowledge and capabilities from Canada into projects that are similar in the U.S.
Okay. Would you be able to restate the expected completion date for Fraser Valley Biogas?
Yeah. 60% complete is the number that we had in the press release. Really the, you know, the amount of civil work, major equipment package work that's been done is a lot further advanced than that. What remains, the most of the scope is bolting everything together and installing it on site. That is all expected to occur in Q2. Having the facility online with the expansion, flowing gas through the expanded facility by the end of Q2 is our expectation at this time.
Okay. Given the capital-intensive nature of RNG expansions, how are you managing inflation risks? Have you seen cost pressures start to ease with elevated interest rates and a slowdown in the housing market?
Sure. Sean, do you wanna take this one?
Yeah, sure. Most all of our budgets for the expansion projects do carry a large contingency as well, which inflation risk is built into those. We typically usually include contingencies 30% +. Our position for Fraser Valley Biogas as an example, is that we're still expecting to come in within the budget and the amounts that we included in the press release. We haven't seen too much inflation in cost pressures with CapEx that we've been ordering because, you know, For our existing projects, a lot of the major pieces of equipment were procured some time ago.
Really, the, you know, the increases that we see is from some of the services provided, which is across the board with a lot of consulting areas, is that, you know, we're seeing 10% increases in consulting costs because of inflation. You know, with all indicators from the Bank of Canada recently, we're expecting, you know, inflation to ease. It has started to ease already. We do expect, you know, those increases from previous periods to start to drop off or to normalize.
What are some of the key milestones and catalysts that you guys are expecting over the next three to six months?
Yeah, great question. I'll go back a couple slides here. I think the key milestones catalyst for us will be, you know, flowing gas at GrowTEC. We've completed commissioning. We're going through the last bit of utility red tape to produce gas at GrowTEC. The facility is running on recycle. We're confident that we'll start to ramp up shortly. We'll talk about that. Also at GrowTEC, you know, maybe not in the next couple of months, but shortly thereafter, phase two expansion, discussion about what that looks like. At Fraser Valley Biogas, obviously the, you know, big focus for our team at the moment is delivering that project that's under construction.
That, you know, that is an imminent update for us, just continual project updates. Executing the long-term offtake agreement at Fraser Valley Biogas. We're producing under an interim agreement and finalizing the long-term offtake there. I think mentioned part of the reason for that earlier, has to do with the timing and the increase in pricing that we're seeing. Project Radius, you know, for us, that's, you know, the financing path for that. You know, with the type of partnership that we enter into, is gonna be really the gating item for us to move into construction. We'd expect that is late Q2, early Q3 announcement where we're bringing in a partner at Project Radius, depending on how those discussions go.
The grant funding that we've applied for, we expect a decision on CAD 10 and a half million dollars of the CAD 20+ million of grant funding that we've applied for. With a positive result there, I think that gives us a lot of tailwinds at PCR for putting together a really, you know, a stronger project than we originally had as well, and a project that requires very little equity funding, which allows us to accelerate our pipeline. I think the other catalyst for us is continuing to add additional projects, moving them from the development stage in our pipeline or early-stage negotiations into definitive agreements. We expect to have some interesting projects to tell the market about in the coming months as well.
At Project Radius, what extent do you guys think you'll be retaining a carried interest in the project, assuming that it's fully financed at the project level?
Yeah, I think the, you know, the template for that is, you know, looking to the other types of deals that have been done that have been announced with, you know, the Enbridges and Shells and BPs of the world coming in and funding development projects. You know, Radius has the size and scale to attract a world-class partner. We're, you know, active in discussions and we'll see where those end up. Looking at those other types of farm-in deals that guys have done where you've got a larger strategic accessing a project like Radius that has multiple phases and, you know, could be a significant spend for them. The devil's in the details, you know, a carried interest for a minority position in the project.
I think that would probably be in the context of, you know, sub 25% of the project increasing up to 50% under, you know, under positive conditions is what we've seen in those other deals. In some cases, you know, that's a complete acquisition of the, of the entity. You know, in this case, I think what we're looking for with Project Radius is that we would, we would retain operatorship, and we would bring in a financial partner. That, that's the discussions that will be in progress over the next couple of months. So far, there's a lot of interest in the project and both on the offtake side, and also on the capital development side.
What are your expectations for government support to help finance Project Radius or even expectations for government support with some of your other projects?
Yeah. Do you want to touch on that? I mean, from a Radius perspective, we're not assuming any grant funding. All of that will be upside. I think maybe, Mischa, you can touch on just the rest of the portfolio and the activities that we've got underway.
We've got multiple grant applications out. When we model these projects, we assume limited to no grant funding. These grant funding really is an upside scenario for us. We know that there is obviously, with the Clean Fuels Fund in Canada and some additional sort of agricultural-based grant funding opportunities, there's a lot of capital out there for projects like GrowTEC and Radius, Fraser Valley Biogas as well. We know that a decision on Net Zero Waste Abbotsford is imminent for the sizable Clean Fuels Fund grant. We're quite optimistic about our ability to access grant funding in the near term and on the long term as these projects get developed.
You guys speak to your project pipeline of 2 million gigajoule per year. How far are you guys kind of along in advancing some of this pipeline? When do you guys anticipate seeing, you know, project announcements?
Yeah. You know, with our active near-term pipeline, it'd be a mix of greenfield projects and partnership projects. On the greenfield side, what we wanna do, we wanna get the project to a point where we know with certainty that it's gonna be going forward before we put together a detailed project announcement, you know, for a couple of reasons. One of the most important one is that we wanna maintain a competitive advantage in that region where we're putting a project together.
I think, you know, from our perspective, there's a couple of projects that are getting close to that line where we've secured the majority of the 5 key elements that we look for in developing a project, being land and a regulatory path to permit a facility, offtake agreements, feedstock agreements, and cost certainty, knowing that we've got an economic project. I think we're getting pretty close on a couple that would be in the greenfield bucket. On the acquisition side, I think, you know, we've got active discussions with a couple of smaller developers that are progressing. I think, you know, similarly, we'd expect to be able to talk about one of, you know, a couple of those projects if everything goes according to plan by the end of the year.
Just lastly, on the insurance side of things, how much longer do you guys have to be able to submit claims? Are you guys anticipating further reimbursements in Q1 and beyond?
Yeah. I'm happy to take that one. We have until November of this year to continue to submit claims or any expenses incurred for 2 years following the flooding events. We don't expect any further proceeds during Q1 as we announced that we already received CAD 1.55 million. We have about CAD 200,000 still outstanding. Obviously any additional costs that come in, we would obviously be putting those forward as part of a future claim.
Okay. There's no more questions at this time. Chase, maybe I'll pass it over to you for just some final words.
Yeah. Thanks, Victoria. I think I really appreciate all the questions, support for our business. I think we're really excited about where we've positioned EverGen and the progress that we've made on our two major construction projects underway, which ultimately leads to long-term reoccurring cash flow and EBITDA for our business that, you know, is, you know, has those near-term catalysts, and we expect to be able to step into that growth phase, you know, here in the coming quarter and towards the end of the year.
We'll have a really substantial amount of free cash flow for the business and that allows us to accelerate our pipeline, which ultimately we're seeing pipelines like we have being valued at, you know, pre-development pipelines being valued significantly by the majors in the space right now. How we take advantage of that, I think Project Radius will be a great test for us on that, we're really excited for what's coming in the next quarter.
Okay. Thanks so much, and thanks everyone for joining today. If you have any additional questions, you can always email them to me at victoria@adcap.ca, and we'll get them answered for you. Thanks, everyone.
Thank you.
Thanks, everyone. Thank you.