First AD Biogas Plant to Treat Organic Waste in London Secures Funds
The site where the new TEG plant will be built at East Dagenham Dock which will become part of the Mayor of London's Sustainable Industries 04 September 2012 The Lancashire, UK based TEG Group's (LSE: TEG) planned 49,000 tonne per annum food and green waste to biogas and compost facility in Dagenham, has secured £21 million of finance needed for construction. The company claimed that the facility at East London's Dagenham Dock in the London Borough of Barking and Dagenham will include London's first Anaerobic Digestion (AD) plant. The facility will process food and green waste using anaerobic digestion (AD) and In-vessel composting (IVC) technology on a 4.7 acre site on the Mayor of London's 60 acre London Sustainable Industries Park (LSIP). The Mayor has committed over £10 million for infrastructure development on the site. TEG said that its scheme will be the first to benefit from investment. The Dagenham facility will comprise a 30,000 tonnes per annum AD plant which will generate around 1.4 MW of electricity and a 19,000 tonnes per annum IVC plant. This energy generated will be used by the Park's tenants and the facility will also produce over 36,000 tonnes per year of AD digestate and 14,000 tonnes per year of compost for agricultural use. The feedstock will come from source segregated food waste and mixed food and green waste produced by local households, commercial and manufacturing enterprises. Finance Funds run by venture capitalists, the Foresight Group have committed £11 million into a new Special Purpose Vehicle (SPV), TEG Biogas (London) Limited, to allow for the construction and operation of the new processing plant. According to TEG, the Foresight Environmental Fund (FEF) has led the project with a £9 million investment, which was cornerstoned by the London Green Fund (LGF), and has attracted investment from a number of private sector investors. The LGF was launched in March 2011 by the Mayor of London, Boris Johnson as part of London's drive to encourage investment into waste and energy efficiency infrastructure to create economic growth and jobs. Further to this, Foresight's UK Waste Resources and Energy Investments Fund (UKWREI) has invested £2 million in the project and secured an additional £2 million in matching private sector funding from Quercus Assets Selection SCA SICAV-SIF (an institutional fund), raising the equity investment to £13 million. UKWREI is managed by Foresight which has been appointed to invest £50 million on behalf of UK Green Investments - the team established within the Department for Business, Innovation and Skills (BIS) to drive investment in low carbon infrastructure in preparation for the UK Green Investment Bank. Alongside the equity investment, TEG said that senior debt of £7.9 million is being provided by London Waste and Recycling Board (LWARB) and Investec Bank plc. The company said that its introduction to the LGF, in which LWARB originally invested £18 million, came through LWARB when the project first applied to the Board's Waste Infrastructure Fund for investment. TEG will construct and operate the plant on behalf of the SPV under an Engineering, Procurement and Construction Contract, which the company expects to generate approximately £16 million in revenues for it over the construction period. Work is due to commence in September 2012, with completion scheduled for the first quarter of 2014. In addition, TEG said that it has been awarded an operating and maintenance contract to operate the facility on behalf of the SPV. The contract is for a 15 year term with annual revenue of approximately £1.3 million escalated annually. Comments "This project represents the first waste investment in the run up to the establishment of the UK Green Investment Bank and sends a clear message to the market and to potential co-investors that we are committed to investing in the UK's green infrastructure," commented Business Secretary, Vince Cable. Wayne Hubbard, Chief Operating Officer of LWARB, added: "This deal is a great example of how a project that is due to operate with short term waste supply contracts can be funded." Meanwhile, the Mayor of London, Boris Johnson said: "Through the London Green Fund and Foresight, my team has worked closely with TEG to secure the finance for this plant and we are set to support more facilities of this nature across the capital working with boroughs and the London Waste and Recycling Board." "We want the London Sustainable Industries Park to become a magnet for energy and environmental enterprises to support hundreds of new jobs," he added. "It is also good news that TEG becomes London's first anaerobic digestion plant providing an innovative, environmentally friendly way to manage the city's waste, helping to cut down on costly landfill," concluded the mayor. Read More 1 MW Food Waste Anaerobic Digestion Facility for Wales The Welsh government's programme for local authorities to recycle food waste has awarded preferred bidder status to TEG Environmental and energy company Alkane Energy for its first AD plant. VIDEO: Biorefinery Turns Starbucks Waste in Sustainable Products in Hong Kong A new 'biorefinery' intended to transform food waste into key building blocks for the manufacture of renewable plastics and other products has been successfully tested using waste Starbucks' by a in Hong Kong university. Planning Permission for Biogas Plant & New Recycling Contract for SITA SITA UK has been granted planning permission for a 50,000 tonne per annum food waste to biogas facility in Packington site near Meriden, by Warwickshire County Council's Planning and Regulatory Committee. Free Magazine Subscription Free Email Newsletter