Foresta Signs Genesis Term Sheet, Gains $2M Convertible Note for Kawerau Development

Fast-Track Approval Accelerates Kawerau Project

Foresta Group Holdings Limited (ASX: FGH) has taken a significant step forward in its development of a renewable biomass facility at Kawerau, New Zealand. The company announced that Stage 1 of its flagship project, a pine chemical and torrefied wood pellet plant, has been included among 22 renewable energy projects in the New Zealand Fast-Track Approvals Act 2024. This legislation aims to streamline consenting processes for infrastructure projects deemed to have substantial regional or national benefits, potentially expediting Foresta’s path to construction.

The inclusion in this fast-track program places Foresta’s Kawerau project alongside 149 other listed developments, ranging from housing to mining and renewable energy, underscoring the government’s commitment to accelerating sustainable infrastructure.

Strategic Partnership with Genesis Energy

In a move that could underpin future revenue streams, Foresta has signed a non-binding term sheet with Genesis Energy Limited. The agreement advances negotiations for the supply of torrefied 'black' wood pellets to Genesis’ Huntly Power Station, targeting an annual supply of 300,000 tonnes by FY2028. This is a landmark development as Genesis seeks to reduce New Zealand’s reliance on coal by integrating sustainable biomass fuels into its energy mix.

While the term sheet is non-binding, it represents the first such agreement Genesis has signed with a potential New Zealand producer of torrefied wood pellets, signaling Foresta’s emerging role in the country’s renewable energy transition.

Resource Consent and Construction Readiness

Foresta has secured resource consent from the Bay of Plenty Regional Council for earthworks and temporary stormwater discharge, critical approvals for the commencement of Stage 1 construction activities. This milestone enables the company to initiate earthworks scheduled for September 2025, aligning with the approved earthworks season.

However, the start of construction remains contingent on successful capital raising efforts. Foresta has indicated ongoing efforts to secure sufficient funding and will provide market updates accordingly.

Funding and Shareholder Developments

Financially, Foresta bolstered its working capital by receiving $2 million AUD from SWAT7D Pty Ltd under a convertible note agreement announced in October 2024. The notes are convertible into ordinary shares at $0.005 per share, with attached unlisted options exercisable at $0.01, providing flexibility for both the company and investors.

In parallel, SWAT7D completed the acquisition of 432.65 million shares from substantial shareholders Ramon and Shirley Mountfort, consolidating its position in Foresta. This transaction was approved by shareholders in January 2025, reflecting confidence in the company’s strategic direction.

Building Local Partnerships and Supply Chains

Foresta is actively negotiating forestry supply contracts within New Zealand and fostering relationships with local Māori iwi and corporations. These partnerships emphasize sustainable stewardship and cultural preservation, aligning with broader environmental and social governance principles.

Engagement with government bodies at multiple levels continues to ensure alignment with national policies and regional development goals, positioning Foresta as a collaborative player in New Zealand’s renewable energy landscape.

Financial Position and Outlook

As of 31 March 2025, Foresta reported a cash balance of $2.13 million and a net operating cash outflow of $449,000 for the quarter. The company’s financial strategy includes leveraging convertible notes and equity to support ongoing development and operational activities.

While the company has made substantial progress on regulatory and partnership fronts, the pace of construction and project execution will depend heavily on successful capital raising and finalisation of binding supply agreements.