Ashurst, in conjunction with Irish firm A&L Goodbody, has advised the funders to Dublin Waste to Energy Ltd, which is majority owned by Covanta, a world leader in providing sustainable waste and energy solutions, to bring the development and financing of the Poolbeg Energy from Waste ("EfW") project in Dublin to a successful close on 19 September 2014.
This intricate project has an approximate capital cost of approximately €500 million and is being built as a Public Private Partnership between Dublin City Council and Dublin Waste to Energy Ltd. Expected to take three years to construct, this state of the art facility will be able to process up to 600,000 tonnes of waste per year, providing significant benefits to Dublin and Ireland in general. It will also be instrumental in ensuring Ireland can meet its EU Landfill Directive targets.
As part of the EU Landfill Directive, which is designed to reduce harmful greenhouse gas emissions from landfills, the project company has entered into an agreement with the four Dublin local authorities through the Dublin City Council to process all waste arising within the region. In addition to providing a solution for meeting the growing problem of landfill sites negatively impacting upon the environment, the EfW plant will also generate a clean source of renewable electricity, providing enough power for approximately 80,000 homes as well as district heating potential for more than 50,000 homes.
The Ashurst teams were led by waste and infrastructure partner Cameron Smith, infrastructure finance partner Patrick Boyle, and construction partner Michael Smith, assisted by associates Nacim Bounouara, Krista Payne and Liudmila D'Cruz; solicitor Dan Jarrett and trainee solicitor Caroline Johansen also assisting.
As well as advising the senior debt group (involving Bank of Ireland, AIB, Ulster Bank, Macquarie Bank, The National Pensions Reserve Fund and Barclays Bank), Ashurst also had separate teams advising the Junior Lenders (Macquarie Capital), led by infrastructure finance partner Derwin Jenkinson; and the Junior Security Agent, led by restructuring and insolvency partner Diane Roberts.
Commenting on the deal, Cameron Smith said:
"This complex project has been over 10 years in the making and is a perfect example of what close co-operation between advisers, funders and sponsors can achieve. The project was notable in a number of key respects which created unique challenges in getting across the line, such as:
• the various tranches of debt and equity posed a number of intercreditor challenges in a way which has not previously been seen in the waste sector;
• this is the first deal to which the National Pension Reserve Fund has lent directly as part of a bank club; and
• this is also the first large scale merchant plant in which the borrower will need to secure all waste supplies, subject to a complex arrangement of revenue support from various parties.
In addition, Patrick Boyle commented:
"We are delighted to have overcome the hurdles involved in this multifaceted waste project, reaching a successful financial close for our long-standing client Dublin Waste to Energy Ltd, and contributing to the growth of the Irish waste PPP market."
