The UK Green Investment Bank (GIB) has made the latest of a flurry of commitments to finance a biomass project in the UK, a sign that the renewables sub-sector is increasingly drawing investors' attention.
GIB's commitment came from the Recycling and Waste LP Fund, a Foresight Group-managed vehicle it is invested in. The fund has pledged £13.2 million ($8.67 million; €7.65 million) to build a 2.2MW combined heat and power (CHP) plant in Rufford. That commitment was matched with a £6.6 million investment from SQN Asset Finance Income Fund.
The project is being developed by Future Biogas and will use poultry litter, straw and other agricultural feedstock to power a farm.
GIB, which is currently in the midst of privatisation, committed to another biomass project earlier this month, agreeing on 29 July to provide an £80 million loan to a 43MW facility in Kemsley. The bank's investment was part of a £300 million financing package that also involved Barclays, Bank of Tokyo-Mitsubishi UFJ, Natixis and Investec.
That came after UK-based renewable energy investment company Low Carbon acquired a majority stake in Energy Networks Europe in July. The firm agreed to fund a 100MW development pipeline to build 19 district heating projects. The first, located in Bedminister, will begin construction at the end of this year.
On 9 August, Danish fund manager Copenhagen Infrastructure Partners and a Scandinavian developer invested £160 million to build a 27.8MW CHP project in Kent. And earlier this week Macquarie said it had reached financial close on a £900 million, 299MW CHP project in north-east England.
Biomass “is widely recognised as one of the most effective ways of processing organic waste,” said Edward Northam, GIB's head of investment banking, adding that this type of generation has “an important role to play in the development of a circular economy in the UK”.