Foresta’s Funding and Regulatory Hurdles Could Delay Kawerau Biomass Plant Build
Foresta Group Holdings reported a $3.375 million net loss for FY2025 while making significant progress on its Kawerau biomass facility in New Zealand, securing key approvals, partnerships, and funding. The company aims to commence construction in FY2026, positioning itself in the renewable energy sector.
- 65% decrease in revenue with a net loss of $3.375 million
- Secured 30-year lease and resource consents for Kawerau facility
- Fast-track approval under New Zealand’s Fast-Track Approvals Act 2024
- Non-binding supply agreements with Genesis Energy and Lawter NZ
- Raised $3.725 million through convertible notes and share placement
Financial Performance and Operational Context
Foresta Group Holdings Limited (ASX – FGH) reported a net loss of $3.375 million for the financial year ended 30 June 2025, marking a 65% reduction in revenue compared to the previous year. The company remains in its development phase, with no operational revenue generated yet, reflecting ongoing investment in its flagship integrated biomass manufacturing facility in Kawerau, New Zealand.
Despite the loss, Foresta has made substantial strides in project development, securing critical milestones that underpin its long-term strategy to become a key player in bio-based energy and chemicals.
Project Development Milestones
Foresta has secured a 30-year lease on industrially zoned land in Kawerau and obtained resource consent for Stage 1 earthworks and stormwater discharge, enabling the commencement of preparatory construction activities. Notably, the project has been designated as one of twelve priority initiatives under New Zealand’s Fast-Track Approvals Act 2024 in the Bay of Plenty region, which is expected to accelerate consenting and construction timelines.
The company is advancing detailed plant design and is collaborating with the Energy Efficiency and Conservation Authority (EECA) to explore geothermal steam integration for process heat, reinforcing its commitment to sustainability and innovative low-carbon manufacturing.
Strategic Partnerships and Market Validation
Foresta has signed a non-binding term sheet with Genesis Energy Limited for the supply of torrefied wood pellets to the Huntly Power Station, targeting a supply of 300,000 tonnes per annum by FY2028. Additionally, a Letter of Intent with Lawter (NZ) Limited covers the purchase of torrefied wood pellets and pine chemicals, highlighting growing market demand for renewable alternatives.
The company’s exclusive technology license agreement with E3 Carbon GmbH and Ceramic Drying Systems Limited grants access to advanced torrefaction processes, enabling Foresta to produce high-quality biomass fuels and pine chemicals through a world-first integrated platform.
Capital Raising and Corporate Developments
Foresta strengthened its balance sheet by raising $2.575 million through convertible notes and $1.15 million via a share placement at a premium to pre-suspension prices. The acquisition of 432.65 million shares by SWAT7D Pty Ltd further validates the company’s strategy and provides working capital for next-stage development.
Board changes included the resignation of Managing Director Ramon Mountfort and the appointment of Russell Wayne Allen as a Non-Executive Director, reflecting a strategic reshaping of leadership to support the company’s growth ambitions.
Risks and Outlook
Foresta faces several risks typical of early-stage development companies, including regulatory approval uncertainties, environmental compliance, technology integration challenges, and the critical need to secure additional funding to commence construction. The company is actively engaged with government bodies, local Māori iwi, and potential investors to mitigate these risks.
Looking ahead, Foresta’s primary focus for FY2026 is to secure the necessary project funding to begin construction of the Kawerau facility, aiming to capitalize on the growing global demand for sustainable bio-based energy and chemical products.
Bottom Line?
Foresta’s FY2025 results underscore the challenges of early-stage development, but its strategic progress and partnerships set the stage for potential growth as it seeks funding to build its Kawerau biomass facility.
Questions in the middle?
- Will Foresta secure the project funding needed to commence construction in FY2026?
- How binding and lucrative will the supply agreements with Genesis Energy and Lawter NZ become?
- What impact will New Zealand’s Fast-Track Approvals Act have on the project’s timeline and regulatory risks?
