A £244 million rail interchange and energy recovery centre is to be developed with support from the UK Green Investment Bank.
The completed facility in South Gloucestershire will convert up to 300,000 tonnes of residual household waste into energy every year.
The waste is collected from six West London boroughs, serving a population of 1.6 million people.
The project will enable over 96 per cent of this material to be diverted from landfill.
The new facility will produce enough electricity to power the equivalent of 50,000 homes and save more than two million tonnes of CO2 over the duration of the contract.
It is expected that the Severnside Energy Recovery Centre (SERC) facility will support up to 200 jobs onsite during the construction phase and many others throughout the supply chain. Once up and running, the facility will create up to 53 new permanent jobs.
The project is part of a 25-year contract between the West London Waste Authority and a consortium led by SITA UK, Scottish Widows Investment Partnership (SWIP) and the ITOCHU Corporation.
GIB will invest £20 million of the senior debt alongside a lending club of Credit Agricole Corporate & Investment Bank, Bank of Tokyo-Mitsubishi UFJ Ltd, Sumitomo Mitsui Banking Corporation and Mizuho Bank. Equity will be provided by SITA UK, Japan's ITOCHU Corporation and Scottish Widows Investment Partnership.
Shaun Kingsbury, chief executive officer of the UK Green Investment Bank, said:
This is a model investment for us. Our mandate is to help mobilise significant sums of private money to invest in important UK infrastructure projects that are both green and profitable. With this project, every £1 of GIB investment brings £11 of other capital, much of it from international investors. The project will bring about an immediate environmental benefit; instead of residual waste from 1.6 million people being sent to landfill each year, it will be used to create enough energy to power the equivalent of 50,000 households.
Business Secretary Vince Cable said:
This is another green infrastructure deal that has got over the line thanks to the involvement of the UK Green Investment Bank. The level of private sector investment it has brought in is impressive and the project will have a significant green impact - diverting waste from landfill and converting it into energy for tens of thousands of homes and businesses. It will also create over 250 new jobs in Gloucestershire.
- Please contact Ronit Wolfson at the Green Investment Bank on 0330 123 2134
Notes to editors
UK Green Investment Bank
The UK Green Investment Bank was launched in November 2012. With £3.8 billion of funding from the UK Government, it is the first bank of its kind in the world. It is a "for profit" bank, whose mission is to accelerate the UK's transition to a greener economy, and to create an enduring institution, operating independently of Government.
SITA UK: a leading recycling and resource management company in the UK since 1988, currently employing more than 6,000. SITA UK currently operates in more than 300 locations throughout the UK serving 12 million residents.
ITOCHU Corporation: a general trading company engaging in various products such as textiles, machinery, information and communications technology, aerospace, energy, metals and minerals, as well as business investment in Japan and overseas. Its purpose is to invest in companies carrying out construction and operation of waste treatment infrastructure under PFI contract. ITOCHU Corporation was an equity investor, alongside SITA UK in the South Tyne and Wear project.
Scottish Widows Investment Partnership (SWIP): is a greenfield PPP funds management platform backed by corporate pension plans, private equity and global institutional investors, including the European Investment Bank. SWIP is part of Lloyds Banking Group.