Glennmont bets £160m on biomass

The Margam Green Energy Project is the fourth asset acquired by the French manager’s €500m Fund II.

London-based Glennmont Partners has acquired the Margam Green Energy Project, a 40-megawatt (MW) biomass power station, from UK developer ECO2 and timber producer Western Logs Group.

The fund manager has paid £160 million (€214 million; $240 million) for the plant, which is to be built in Port Talbot, Wales. The purchase price includes an unspecified amount of debt provided by Deutsche Bank and Eksport Kredit Fonden, the export credit agency of Denmark. Glennmont did not reply to requests for further details about the debt funding before publication.

The transaction was funded via Glennmont Clean Energy Fund Europe II, a vehicle that reached its €500 million final closing at the beginning of September 2014. Markam Green Energy represents the fourth asset in the fund’s portfolio, which also includes wind and solar projects in France and Portugal.

“The completion of the deal marks the inclusion of the first biomass generation in Glennmont Clean Energy Fund Europe II and a significant step towards the completion of the diversified European portfolio of clean energy investment,” the firm said in a statement.

Fuel for the plant will be sourced from the waste wood market and supplied by Stobart Biomass Products under a long-term, index-linked supply contract. A consortium consisting of Danish waste-to-energy company Babcock Wilcox Volund and UK developer Interserve has taken on the construction contract. Babcock Wilcox Volund will also operate the plant.

Glennmont launched Fund II shortly after spinning out from French lender BNP Paribas in January 2013, initially targeting €450 million. Peter Dickson, a partner at Glennmont, told Infrastructure Investor then that UK biomass was an area where the firm was currently “putting some time”.

Glennmont’s first fund, fully committed, manages operating projects in the UK, Ireland, France, Italy and Portugal, totalling 354MW of generating capacity.