King & Wood Mallesons SJ Berwin has advised GCP Infrastructure Fund (GCP) and the UK Green Investment Bank (GIB) on their project financing of a £47.8 million waste wood biomass plant in Tyseley, Birmingham.
Over its expected 20 year lifetime the 10.3 MW plant is forecast to supply enough renewable electricity to power 17,000 homes each year and is expected to save around 2.1 million tonnes of CO2 equivalent and divert up to 1.3 million tonnes of recovered wood from landfill.
Nexterra, a Canadian engineering company, will provide the innovative gasification technology for the plant, which will be the first of its kind in the UK.
The plant, which has been described by Business Secretary Vince Cable as “helping to build a stronger economy”, will also create over 100 jobs during construction and 19 full jobs once operational in 2016.
GIB, the world’s first dedicated green bank, directly invested £12 million by way of preferred loans into the project. GIB also provided an additional £6.2 million through its cornerstone investment in Foresight's UK Waste Resources and Energy Investments (UKWREI) fund. Specialist infrastructure debt fund GCP provided £11 million as preferred loans, whilst the remaining investment came from a consortium of equity investors comprising Balfour Beatty plc, Eternity Capital Management Limited and the developer, Carbonarius.
Shaun Kingsbury, Chief Executive of UK Green Investment Bank, said: "As the UK works towards its targets to generate more power from green sources, it's important that we bring on new technologies. I'm pleased the Green Investment Bank has been able to support the first gasification plant of its kind in the UK and hope it offers a positive demonstration effect that others will follow."
Ronan Kierans of Gravis Capital Partners, the investment adviser to GCP, said: “We are delighted to be involved in the provision of preferred loans to assist in the funding of this project, working alongside some excellent partners to deliver this ground-breaking scheme in the UK.”
The King & Wood Mallesons SJ Berwin team was led by Energy, Infrastructure & Project Finance partner Rinku Bhadoria, alongside Funds and Indirect Real Estate partner Steven Cowins. Rinku and Steven were supported by associates Thomas Coles and Kim Child. Partner Heather Corben and associate Irfaan Merali advised on the tax aspects of the transaction.
Rinku Bhadoria, Energy, Infrastructure & Project Finance partner at King & Wood Mallesons SJ Berwin, said: “We are delighted to have advised GIB and GCP on this significant project in terms of both cementing their support to the biomass sector and the UK's renewable energy targets. It is encouraging to see projects using innovative technologies reaching financial close in what remains a challenging market. GCP and GIB are valuable clients of King & Wood Mallesons SJ Berwin, having worked together earlier this year on the financing of the Evermore Renewable Energy 15.8MW wood fuelled combined heat and power (CHP) station at Lisahally, in Northern Ireland.
