More than £13 million in funding has been committed to a new anaerobic digestion (AD) plant in Nottinghamshire that will generate renewable energy.
The new facility at Stud Farm in Rufford will use poultry litter, straw, and other agricultural feedstock from adjacent farms to fuel a combined heat and power (CHP) plant, supplying electricity and heat to local businesses. Any surplus electricity will be supplied to the UK grid.
Construction of the 2.2 MW facility, to be developed and operated by Future Biogas Limited is now underway.
The Foresight-managed Recycling and Waste LP (RAW) Fund, in which UK Green Investment Bank plc (GIB) is a cornerstone investor, has committed £6.6m to the project, with SQN Asset Finance Income Fund matching that sum to take the total investment in the project to £13.2m.
The RAW fund was launched in February last year to provide direct funding towards small-scale recycling and waste projects around the UK.
The facility is expected to generate approximately 16,300 MWh of renewable electricity each year, sufficient to power nearly 4,000 households, while cutting greenhouse gas emissions by approximately 6,900 tonnes of CO2 equivalent per annum, equivalent to removing 3,200 cars from the road for the lifetime of the project.
The plant will also generate 16,000 tonnes per annum of a recycled digestate bi-product, to be used as compost on local farms. All of the facility’s feedstock will be sourced locally.
Edward Northam, Head of Investment Banking, UK Green Investment Bank, said:
Anaerobic digestion is widely recognised as one of the most effective ways of processing organic waste. AD facilities have an important role to play in the development of a circular economy in the UK.
Nigel Aitchison, Partner, Foresight, said:
At Foresight we are continuing to find attractive small-scale AD projects that are making a lasting difference to the communities they serve while generating attractive returns for our investors.
Neil Roberts, Managing Director, SQN Capital Management, said:
Since the SQN Fund’s IPO in July 2014, renewable projects have formed a meaningful part of our diversified portfolio. This is our fourth joint financing with the RAW fund which fit well with our key investment criteria of financing business essential, revenue earning assets with high in place value.
About the project
Total GIB share of investment: £6.6m
Total investment: £13.2m
Co-investor: SQN Capital Management
Developer: Future Biogas Limited
Operator: Future Biogas Limited
Technology provider: Thöni for the AD plant and Clarke Energy for the CHP
Expected date of completion: Q4 2016
Notes to editors
About the UK Green Investment Bank
UK Green Investment Bank plc (GIB) was launched in November 2012. With £3.8bn 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.
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.
Foresight Group is a leading independent infrastructure and private equity investment manager which has been managing investment funds on behalf of institutions and retail clients for more than 30 years.
Foresight has £1.9 billion of assets under management across a number of funds, including Listed Vehicles, Limited Partnerships, Enterprise Investment Schemes (EISs) and Venture Capital Trusts (VCTs).
Foresight boasts one of the UK’s leading environmental infrastructure investment teams comprising 18 investment professionals, which has led investment into c. £850 million of UK environmental assets with a waste processing capacity of more than 1 million tonnes per annum, creating 126MW of renewable energy capacity and saving more than 600,000 tonnes per annum of CO2 emissions.
Foresight manages the £78m UKWREI and £50m RAW Fund mandates from the UK Government’s Green Investment Bank for UK environmental infrastructure, the £200m Bioenergy Infrastructure Group (BIG), the £25m Foresight AD EIS Fund, the £60m Foresight Environmental Fund (FEF).and was recently appointed by the Australian Clean Energy Finance Corporation (CEFC) to manage the A$200m Australia Bioenergy Fund (ABF).
Foresight has offices in London, Rome, San Francisco, Sydney, Nottingham, Manchester and Guernsey.
SQN Capital Management is an international multi-strategy investment manager with a focus on equipment leasing and asset finance for business-essential assets and projects in the £5m to £50m range. Through its various managed funds and accounts, SQN provides financing for capital intensive operations across a diverse array of industries including the Agricultural, Energy, Environmental, Manufacturing, Marine, Medical, Modular Accommodation, Technology, Telecommunication and Transportation.