The UK Green Investment Bank has provided an £80 million ($105 million; €95 million) loan to build a large-scale combined heat and power plant in Kent.
GIB's senior debt agreement with waste to energy developer Wheelabrator Technologies (WTI) is part of a £300 million financing package to build the 43MW facility in Kemsley. The other lenders include Barclays, Bank of Tokyo-Mitsubishi UFJ, Natixis and Investec. Constructions industrielles de la Méditerranée is developing the project, which is set to begin construction next month and be operational by 2019.
The plant will generate electricity for the local grid and heat the Kemsley Paper Mill, replacing part of the factory's gas-fired steam supply. GIB said it will prevent around half a million tonnes of waste from going to landfill every year. The facility is also billed as the first large-scale energy-from-waste facility supported by a Contract for Difference mechanism.
“This plant will put renewable energy to work for one of Kent's major employers while helping the UK meet its climate change and waste management goals,” GIB chief executive Shaun Kingsbury said in a statement.
“It also shows that the green economy continues to attract finance for projects like this,” Business and Energy Secretary Greg Clark added.
GIB had previously committed to Foresight Group's £50 million Recycling and Waste Fund, which provided £10.5 million last month for two anaerobic digestion plants in Northern Ireland. It also committed £47 million of equity to a waste-to-energy facility in Northern Ireland last November.
The board of GIB announced plans to privatise the green bank in June 2015, with the auction process officially starting in March.
The two consortia that have emerged as bidders include a tie-up between New York-headquartered KKR and UK renewables investment manager Temporis Capital, as well as a team of comprising London-based Sustainable Development Capital, the Pension Protection Fund, General Electric, US insurer John Hancock and Japan's Mitsui.
Entities belonging to Australia’s Macquarie Group are also understood to have been shortlisted.