Riverstone Credit Opportunities Income (RCOI) is investing in US renewable natural gas (RNG) through a $150m (€142m) sustainability-linked loan.

The financing provides Clean Energy Fuels, a NASDAQ-listed public company, with capital to develop negative carbon intensity RNG projects and construct RNG fuelling stations for the North American transportation sector.

Clean Energy is looking to expand its RNG projects at dairies, which capture fugitive methane and turn it into a fuel made entirely from organic waste and reduces carbon emissions by an average of 300% versus diesel.

The company said demand for the green fuel continues to grow as customers such as Republic Services, WM, UPS, LA Metro and New York City MTA expand their RNG fleets.

The creation of the four-year first-lien term loan means the London-listed RCOI fund is now fully invested.

Danny Flannery, managing director of Riverstone Credit, the company’s investment manager, said: “Clean Energy Fuels pioneered RNG as a vehicle fuel and continues to be the largest provider of RNG for the transportation industry throughout North America. We are thrilled to partner with them on their quest to deliver fully zero-carbon RNG by 2025.

“RCOI is now nearly fully deployed in an attractive and diversified portfolio of independently accredited green and sustainability-linked loans that support the company’s target annual dividend yield of 8%, paid through quarterly distributions.”