£110m funding secured for biggest waste wood renewable energy facility in the North West

• New £110m project to construct a 20.2 MWe, 7.8 MWth Combined Heat and Power (CHP) plant in Widnes, Merseyside
• The project will be the largest waste wood renewable energy plant in the North West
• Over its lifetime, the project is estimated to save around 1.3m tonnes of greenhouse gas emissions and produce enough electricity to power the equivalent of 35,000 homes.

Foresight Group (Foresight) and the UK Green Investment Bank (GIB) have today announced an investment in the construction of a new waste wood CHP facility in Merseyside.

The 20.2 MWe and 7.8 MWth CHP plant will be powered by 146,000 tonnes of Grade B-C recovered wood each year, sourced by Stobart Biomass Products Limited (Stobart) under a long-term fuel supply contract. The facility will be providing power to the grid and the heat offtake will be used by Stobart’s adjacent wood drying facility. 

It will be built within the Mersey Multimodal Gateway project, a 180 hectare logistics hub, just west of Liverpool.

The project, which is expected to become operational by December 2016, will be amongst the largest power plants of its type in the UK, and is the largest waste wood plant in the North West. 

The plant will be built and operated by Danish power plant specialist Burmeister & Wain Scandinavian Contractor A/S, and over its expected 20-year lifetime, the facility is forecast to:

• supply renewable electricity equivalent to the needs of more than 35,000 homes each year;
• create more than 200 construction jobs and 20 full time jobs once operational;
• and deliver a reduction in greenhouse gas emissions of around 1.3m tonnes, equivalent to taking nearly 30,000 cars off the road.

GIB is providing £16.9m of mezzanine loans and also making a £13.2m equity investment, via its Foresight-managed fund, UK Waste Resources & Energy Investments (UKWREI), in which it is the cornerstone investor.

The remainder of the £42.1m mezzanine finance is being provided by GCP Infrastructure Investors (GCP).

Investec Bank plc (Investec Bank) and Eksport Kredit Fonden (EKF) have together committed £42.5m of senior loans, while Stobart and BWSC will both take an equity stake with commitments of £9.8m and £2.6m respectively.

This project has brought together the same investors who are behind the construction of the 15 MW CHP Evermore Renewable Energy project in Northern Ireland, announced by GIB and Foresight in July 2013.

"This project is a great example of how we can build the next generation of energy and waste management infrastructure in a way that is green, cost-effective and highly efficient. This type of innovative infrastructure adds to our domestic electricity generation and reduces our carbon emissions.

What is particularly important is that these projects are replicable and scalable. The Widnes project has been brought together by the team that supported a similar project in Northern Ireland and I hope we will see many more."

Shaun Kingsbury
Chief Executive, UK Green Investment Bank

"This investment in one of the largest green power plants in the UK will create more than 200 local jobs, cut greenhouse gas emissions and generate enough renewable energy to power 35,000 homes a year.

The project would not have happened without the Green Investment Bank - it is at the heart of our industrial strategy, improving energy efficiency through innovation and creating sustainable jobs and growth."

Vince Cable
Business Secretary

"The Foresight team has worked over many months with our financing partners, our contractors and suppliers to structure and complete another landmark investment. This deal is further demonstration that Foresight can structure and deliver large scale renewable energy infrastructure investment opportunities that are attractive to both banks and other institutional investors."

Philip Kent
Senior Investment Manager at Foresight Group, and Director of Mersey Bioenergy Ltd

"BWSC is very proud of being part of the development team who together with our strong partners have taken the Widnes project to Financial Close. This deal follows last year’s successful Financial Closure of the Lisahally CHP plant in Northern Ireland with the same financing partners and demonstrates BWSC’s strong commitment in providing sustainable energy solutions to the UK."

Christian Grundtvig
Director of Project Development & Investments of BWSC A/S

"We are pleased to have closed another landmark deal in this sector. This project really shows that experienced, capable partners working together can find solutions to deliver complex projects."

Adam Gordon
Co-head of Power Finance at Investec

"This agreement secures an attractive energy investment for the Group and will make an important contribution towards achieving our target of delivering 2m tonnes of fuel per annum into the UK biomass market by 2017/18. It also demonstrates the strength of our integrated infrastructure, energy and engineering capabilities.

This CHP Plant will generate a strong return on investment in the plant’s equity as well as providing the Group with a 16 year biomass fuel supply contract, a long-term wood drying income stream and valuable engineering revenue on the development."

Richard Butcher
CEO, Stobart Energy & Infrastructure

"GCP is delighted to be part of another major biomass project.  This deal will add to and continue to help diversify GCP’s renewable portfolio book and further demonstrates GCP’s ability to help fund large scale renewable projects."

David Conlon
Director Gravis Capital Partners