£16m!3 Sep 2012 08:12
In addition, TEG has been awarded an Operating and Maintenance Contract ("O&M Contract") to operate the facility on behalf of the SPV. The O&M contract is for a 15-year term with annual revenue of approximately £1.3m per annum, escalated annually.
The total project investment in the SPV is approximately £21m. Foresight Group funds have committed £11 million into the SPV to allow for the construction and operation of the new processing plant of which the Foresight Environmental Fund ("FEF") has led the project with a £9m investment. The FEF was cornerstoned by the London Green Fund ("LGF"), and has attracted investment from a number of private sector investors. The LGF was launched in March 2011 by the Mayor of London, Boris Johnson as part of London's drive to encourage investment into waste and energy efficient infrastructure to create economic growth and jobs.
Foresight's UK Waste Resources and Energy Investments Fund ("UKWREI") has invested £2m in the project. UKWREI secured an additional £2m in matching private sector funding from Quercus Assets Selection SCA SICAV-SIF (an institutional fund), raising the equity investment to £13m. UKWREI is managed by Foresight who have been appointed to invest £50m on behalf of UK Green Investments - the team established within the Department for Business, Innovation and Skills to drive investment in low carbon infrastructure in preparation for the UK Green Investment Bank.
Alongside the equity investment, senior debt of £7.9m is being provided by London Waste and Recycling Board ("LWARB") and Investec Bank plc. TEG's introduction to the LGF, in which LWARB originally invested £18m, came through LWARB when the project first applied to the Board's Waste Infrastructure Fund for investment.
The new facility will be capable of processing 49,000 tonnes per annum of food and green waste via both AD and IVC technologies on a 4.7 acre site which forms part of the London Sustainable Industries Park (SIP) owned by Greater London Authority ("GLA") and is the centrepiece of the Mayor of London's new Green Enterprise District.
This will be the first AD plant in central London and will generate approximately 1.4MW of electricity, sufficient to power approximately 2,000 homes. It will also produce over 36,000 tonnes p.a. in AD digestate and 14,000 tonnes p.a. of compost for agricultural use. The feedstock will come from source segregated food waste and mixed food and green waste produced by local households, commercial and manufacturing enterprises.
Planning permission for the facility has already been obtained and the Section 106 planning agreement has also been completed. The planning permission allows for future expansion of the facility with a further 20,000 tonnes per annum of AD capacity.