loftya3 Sep 2012 08:11
Yes - well done all who stayed in:
Dagenham Project Reaches Financial Close
The TEG Group Plc ("TEG"), the AIM listed cutting edge green technology company, which develops and operates organic composting and energy plants, is pleased to announce that Financial Close has been achieved for the Dagenham project, the combined in-vessel composting ("IVC") and anaerobic digestion ("AD") facility to be constructed in London. The Foresight Group ("Foresight"), the specialist recycling and green energy investor, has raised the full capital required to fund the facility and all contracts have been signed.
A special purpose vehicle ("SPV") has been created called TEG Biogas (London) Limited. TEG has taken approximately 24.5% shareholding in the SPV, with the balance of equity being held by Foresight and its co-funders. TEG will hold a seat on the board of the SPV.
TEG has been awarded an Engineering, Procurement and Construction Contract ("EPC Contract") by the SPV to construct the facility. The EPC Contract will generate approximately £16 million in revenues for TEG over the period of construction, which will commence in September 2012 and is scheduled to be completed in Quarter 1 of 2014.
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
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