- UK Green Investment Bank plc and John Laing Group plc commit £48m to 27.7 MW Cramlington Combined Heat and Power plant, developed by Estover Energy
- Finished facility will generate 213 GWh of renewable electricity annually – enough to power 52,000 homes per year
- Generated electricity will be split between local businesses and Statkraft
- The reduction in greenhouse gas emissions will equate to the removal of 25,000 cars from the UK’s roads over 20 years
- Project to create up to 25 positions in plant operations and approximately 20 jobs in the supply chain
UK Green Investment Bank plc (GIB) and John Laing Group plc have committed £48m of equity to a new £138m renewable energy facility in North East England, developed by Estover Energy.
The biomass Combined Heat and Power (CHP) plant in Cramlington, Northumberland, will generate 213 GWh of renewable electricity annually – enough to power 52,000 homes. It is also expected to reduce greenhouse gas emissions by circa 56 kt CO2e annually, the equivalent of taking 25,000 cars off the road during its lifetime.
Much of the generated electricity will be purchased by Statkraft under a long-term Power Purchase Agreement (PPA), but the area’s thriving pharmaceutical sector, recognised as an essential element of the North East economy, will benefit from its output.
Electricity will be supplied to local businesses operating in the adjacent industrial estate, namely Aesica Pharmaceuticals and MSD. The plant will also have the potential to provide renewable heat to neighbouring facilities.
GIB will make a £21m investment in the project, with John Laing investing in a stake worth £27m. Barclays will provide the remainder of the funding as debt, 60% of which will be guaranteed by the Danish export credit agency EKF.
The construction of the plant will be undertaken by a consortium of Burmeister & Wain Scandinavian Contractors A/S (BWSC), the consortium leader, and Burmeister & Wain Energy A/S (BWE). BWSC will operate the plant upon completion under a 12-year Operations & Maintenance contract. Up to 25 permanent positions will be maintained at the operational facility, with further jobs created within the project supply chain.
Fuel for the plant will be provided by local growers and forest industry suppliers.
Ed Northam, Head of Investment Banking at the UK Green Investment Bank, said:
The Cramlington plant promises to create local jobs, support an industry whose vitality is essential to the growth of the regional economy and help cut UK greenhouse gas emissions while promoting the country’s adoption of green energy sources.
Ross McArthur, Managing Director of Renewable Energy for John Laing, said:
Our investment in Cramlington biomass CHP plant builds on the success of our partnership with Estover and GIB established on Speyside Renewable Energy plant. This exciting new project demonstrated the valuable contribution biomass can make to delivering renewable heat in the UK. Cramlington adds further depth to John Laing’s growing portfolio of renewable energy assets in the UK and internationally.
Marcus Whately, Founder and Co-CEO at Estover Energy, said:
Nearly £140m invested in the Cramlington CHP plant is fantastic news for the North East and for Estover. It means more jobs in forestry, and a secure energy supply for industry. Twice the size of our first plant in Scotland, it shows Estover is becoming a real force in these long-term energy and infrastructure projects.
Nial Gemmell, Director at Barclays Bank, said:
With Barclays’ strong track record in supporting renewables projects we saw our part in such a high-profile project through the provision of debt finance as a natural fit. Working with GIB, John Laing and Estover to help deliver this deal further demonstrates our continued commitment to the UK renewable energy sector.
Total GIB share of investment: £21m
Total capital mobilised: £138m
Co-investors: John Laing, Barclays
Expected completion: Late 2017/early 2018
Developer: Estover Energy
EPC contractor: Consortium of BWSC and BWE
O&M operator: BWSC
Advisers to GIB: Pinsent Masons, Operis
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.
About John Laing
John Laing is an international originator, active investor and manager of infrastructure projects. Its business is focused on major transport, social and environmental infrastructure projects awarded under governmental public-private partnership (PPP) programmes, and renewable energy projects, across a range of international markets including the UK, Europe, Asia Pacific and North America.
About Estover Energy
Estover Energy is a UK-based developer, investor and manager of sustainable power and infrastructure projects. With a track record in developing large renewable energy infrastructure projects, Estover seeks to help meet the energy challenges of the next decade – energy security, the energy gap and climate change.
Estover develops from inception through to financing and eventual operation, medium to large scale infrastructure projects.