The Minnesota Propane Association wants the administration of Gov. Tim Walz to consider liquid propane as an economical alternative to spending $4.7 million on electric-powered school buses.

The money is coming from the $47 million Minnesota receives as its share of the multibillion-dollar settlement from the global Volkswagen pollution-cheating scandal.

State officials have floated ways to use the funds in pursuit of a cleaner, greener transportation future.

The Minnesota Pollution Control Agency (MPCA) plans to invest $23.5 million over the next four years under a draft plan.

About 65% of the funds would help electrify Minnesota’s transportation sector.

About $7 million will be spent on electric heavy-duty vehicles, such as transit buses; $4.7 million on electric school buses; $3.5 million on cleaner heavy-duty vehicles, including trucks; $2.35 million on school bus replacement; and $2.35 million on cleaner, heavy-duty off-road equipment, such as locomotives, ferries and port equipment.

The MPCA also said it will spend 90% of the $3.52 million set aside for 43 electric vehicle charging stations in greater Minnesota, expanding the statewide charging network by more than 2,400 miles.

“In the Twin Cities, participants shared concerns about school buses and the need to replace more of them with newer technology vehicles, especially electric buses,” the MPCA report stated. Others expressed interest in using electric vehicles and concern that “without charging opportunities across the state, they would not be able to travel outside of the metropolitan area.”

Gregg Voss, a spokesman for the propane industry, which produces a fairly clean fuel from a natural gas-petroleum hybrid that also is used for cooking and heating, said 40 state school districts are reducing emissions and saving money with propane school buses. They include Eastern Carver County, Minneapolis Public Schools, Proctor Public Schools and the St. Francis district.

Voss cited a recent study by West Virginia University’s Center for Alternative Fuels, Engines and Emissions, which uncovered the Volkswagen diesel-emission scandal.

He said nitrogen-oxide emissions are up to 34 times higher for stop-and-go routes common for a diesel bus than a propane bus. Nitrogen oxides, like nitrogen dioxide, aggravate asthma, bronchitis and other respiratory issues.

Voss said propane-fuel buses cost up to four times more than electric buses, with little engine maintenance because the fuel is so clean and propane stations cost less than electric stations. And the fuel is cheaper than diesel.

“People think about propane in terms of grilling or home heating or forklifts, but there are 18,000 propane buses in use across North America, transporting 1.1 million kids to school every day,” Voss said by e-mail. “Electric buses may be the future, but right now, if districts and bus contractors want a ‘plug-in solution’ to reducing both cost and emissions, then propane is the answer.”

The MPCA is collecting public comments on the proposed use of the Volkswagen funds at:

Generally, clean-energy advocates believe the best way to a less-carbon-polluting future is through electrification of the car-truck-bus fleet as nearly 30% of the state’s power comes from renewable sources that emit less planet-warming emissions.

Neal St. Anthony

Private equity

Värde launches its 13th investment fund

Minneapolis-based Värde Partners, one of the state’s oldest and most active international private-equity investors, has raised nearly $2.5 billion for its 13th investment fund in 26 years.

The fund, which exceeded its $2 billion target, has the flexibility to invest in a range of credit and credit-related assets globally, including publicly traded debt, real estate and financial services.

“Over the past 26 years we have built a global platform with the agility to seek attractive risk-adjusted value in opportunistic credit and asset markets,” said CEO George Hicks. “In this fund, we utilize our deep experience through many market cycles with the flexibility to invest in both private and liquid markets, across capital structures and regions.”

Värde expects the opportunity set to be driven by distressed lenders with high levels of nonperforming loans, and cyclical opportunities associated with industry or economic downturns.

“Against a backdrop of intense economic uncertainty, there are several significant pockets of distress around the world today, and we expect that opportunity to grow over the investment period of the fund,” said Ilfryn Carstairs, co-chief investment officer. “We have strategically built our right to play in markets where we can target the gaps left behind by traditional capital providers as they continue to retrench.”

The investors included new and long-term sources of capital.

Founded in 1993, by Hicks and retired CEO Marcia Page, who remains chairwoman of the board and a partner, Värde has invested more than $68 billion since inception and manages over $14 billion on behalf of a global investor base.

The firm has offices downtown and in London, New York, Singapore and elsewhere, employing about 250.

Värde stands for “value” in Swedish.

Neal St. Anthony