Waste and bioenergy

Kemsley energy from waste CHP plant agrees project finance package

28 Jul 2016

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UK Green Investment Bank plc (GIB) has today committed £80m of senior debt to the construction of a new large-scale combined heat and power (CHP) energy from waste facility near Sittingbourne in Kent.

Summary

  • £80m investment

    GIB is investing £80m in a new £340m CHP plant in Kent

  • Electricity for the grid

    The plant will generate electricity for the grid and heat for Kemsley Paper Mill in Kent

  • 500,000 tonnes

    The plant is also expected to help reduce greenhouse gas emissions by over 163,000 tonnes per year and prevent around half-a-million tonnes of waste from going to landfill

  • 37,500 homes

    The facility is expected to generate up to 154 GWh of renewable electricity annually, enough to power 37,500 homes


Once complete, the 43 MW plant will supply renewable electricity to the grid and renewable heat to DS Smith’s Kemsley Paper Mill, which produces sustainable packaging for the retail industry. 

The plant is expected to help decarbonise the production process by replacing part of the mill’s gas-fired steam supply and support the UK government’s increasing efforts to cut carbon emissions from the manufacturing sector.

The project developer, Wheelabrator Technologies Inc (WTI), has secured more than £300m of debt from a lending club that includes GIB alongside Barclays, Bank of Tokyo-Mitsubishi UFJ (BTMU), Natixis and Investec.

The plant becomes the first large-scale energy from waste facility supported by the Contract for Difference (CfD) mechanism. It is expected to generate up to 154 GWh of renewable electricity annually once fully operational – equivalent to the power consumed by 37,500 homes – and 180 GWH of renewable heat.

Displacing fossil fuels in heat and power production, the facility is also expected to help reduce greenhouse gas emissions by over 163,000 tonnes per year – equivalent to removing 75,000 cars from the road for the lifetime of the project – and prevent around half-a-million tonnes of waste from going to landfill per annum.

 Constructions industrielles de la Méditerranée S.A. (CNIM) has been awarded the engineering, procurement and construction (EPC) contract for the project. WTI will manage the operations and maintenance (O&M) of the plant. 

Around 500 jobs are expected to be created during the construction phase, with the plant expected to support around 40 full-time operational roles upon completion.

Waste will be supplied by a number of local and national waste management companies. The plant is expected to come online in 2019.


Greg Clark, Business and Energy Secretary, said:

As well as creating hundreds of construction jobs, this latest investment by the UK Green Investment Bank is an important contribution towards combating climate change and building an energy infrastructure for the 21st century that is cleaner, secure and affordable.

It also shows that the green economy continues to attract finance for projects like this.


Shaun Kingsbury, Chief Executive, GIB, said:

This plant will put renewable energy to work for one of Kent’s major employers while helping the UK meet its climate change and waste management goals. Combined heat and power is a prominent feature of the low-carbon energy infrastructure in mainland Europe and Scandinavia and is one of the key technologies that can help British industry become more efficient, competitive and cleaner.


Paul Green, Managing Director, Wheelabrator, said:

We remain focused on continuing to develop our pipeline for growth in the UK and building long-lasting relationships, including the one we have with DS Smith. We are committed to bringing our experience and industry expertise to Wheelabrator Kemsley to deliver the highest safety and operational performance.


Hugo Fisher, Group Communications Director, DS Smith, said:

DS Smith is committed to recycling and the effective use of waste as a resource, and we are passionate about minimising waste to landfill. The energy from waste project at Kemsley will provide steam via renewable energy and reduce our use of fossil fuels.


Contacts

Stephen Moir, UK Green Investment Bank: stephen.moir@greeninvestmentbank.com / 03301 232 129


About the project

Total GIB share of investment: £80m
Total capital mobilised: £340m
Co-investors: Barclays, Bank of Tokyo-Mitsubishi UFJ (BTMU), Natixis and Investec
Expected date of completion: 2019
Developer: Wheelabrator Technologies Inc (WTI)
EPC contractor: Constructions industrielles de la Méditerranée S.A. (CNIM)
O&M: Wheelabrator Technologies Inc (WTI)


Notes to the editors

About the UK Green Investment Bank

UK Green Investment Bank plc (GIB) was launched in November 2012. With initial 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.

GIB is wholly owned by HM Government. The Company is not authorised or regulated by the Financial Conduct Authority or the Prudential Regulation Authority. A wholly owned subsidiary UK Green Investment Bank Financial Services Limited, is authorised and regulated by the Financial Conduct Authority.

www.greeninvestmentbank.com 

About WTI

Headquartered in Portsmouth, New Hampshire, Wheelabrator creates clean energy from everyday residential and business waste. Including its new facility in the UK (Knottingley, West Yorkshire), Wheelabrator has a platform of 16 energy-from-waste facilities, four independent power-producing facilities, four ash monofills and three waste transfer stations. 

Wheelabrator has an annual waste processing capacity of over 6.8 million tonnes (7.5 million tons), and a total combined electric generating capacity of 853 megawatts - enough energy to power more than 805,000 homes. Wheelabrator facilities also recover metals for recycling into commercial products. Wheelabrator is owned by Energy Capital Partners, an energy-focused private equity firm with offices in Short Hills, New Jersey, Houston and San Diego. 

www.wtienergy.co.uk