GIB Invests £35m Into Tilbury Biomass Facility

UK Green Investment Bank plc (GIB) and Irish electricity utility Electricity Supply Board (ESB) have made a combined commitment to invest £70m in a new £190m renewable power facility at the Port of Tilbury, Essex.

The agreement marks ESB’s first investment in the UK’s waste and biomass sector.

GIB and ESB are each committing £35m in a combination of equity and shareholder loans, with an additional £2m participation from technology provider Aalborg Energie Technik a/s. Senior debt funding is being provided by EKF (Eksport Kredit Fonden), Investec and Rabobank.

Artist impression

The Tilbury Green Power facility is expected to generate 300 GWh of green electricity per year, enough to power more than 70,000 homes, when it is commissioned in early 2017.

Up to 370 jobs will be created during the construction phase and nearly 50 permanent jobs in on-going operations. Stobart Biomass will be providing 270,000 tonnes per year of waste wood fuel for the project, sourced from the local catchment area and processed at an onsite facility.

BWSC has been appointed EPC contractor and O&M provider for the project.

Shaun Kinsbury, Chief Executive, UK Green Investment Bank, said: “The Tilbury project is well placed to capitalise on the UK’s largest regional waste wood market, generating green electricity and creating local employment from London’s waste resources. The project is also important for marking the first investment of the Irish electricity utility ESB in UK waste and biomass infrastructure.”

Shaun Kinsbury, Green Investment Bank – “The Tilbury project is well placed to capitalise on the UK’s largest regional waste wood market, generating green electricity and creating local employment from London’s waste resources”

Pat O’Doherty, Chief Executive, ESB, said: “ESB’s investment in Tilbury Green Power demonstrates the company’s continuing commitment renewable electricity generation and further reducing the carbon mix in our portfolio. It complements ESB’s existing UK investments in wind and gas-fired generation.”

ESB is delighted to be making this investment in partnership with the Green Investment Bank. As the British and Irish energy markets move closer together, investments like Tilbury will be increasingly important on both sides of the Irish Sea.

Adam Gordon, Power and Infrastructure Finance, Investec Bank, said: “We are pleased to have closed another landmark deal in this sector. The project really shows that experienced, capable partners working together can find solutions to deliver complex projects.”

On Monday (23 March) the GIB confirmed it will also invest £28.25m into the new £111m Levenseat few project in Lanark, Scotland, alongside Foresight Group and Zouk Capital. (See CIWM Journal Online story)

Investment Criticism

Concerns were raised earlier this week that GIB interventions in the UK waste sector were likely to prove “far from green”, and risk hindering the country’s efforts to increase recycling and decarbonise energy, according to Eunomia’s Dominic Hogg.

After reviewing of the projects funded by the bank since it was created in 2012, the chairman of the consultancy revealed that out of a total waste sector investment of £269.7m, over 90% is in projects that are mostly or wholly energy from waste (EfW) residual waste treatment facilities.

Of the ten projects that it has funded, whether directly or through its fund managers, seven are wholly or mainly EfW.

Dominic Hogg, Eunomia – “If there’s one thing you’d expect a group of bankers to be able to do right, it’s their sums. Had they got the interest rate wrong on their investments, heads would roll”

The remaining three are anaerobic digestion (AD) plants. These ten projects yield a total of 1,935k tpa of treatment capacity. Of this, 3% is for recycling, 12% for AD and 85% thermal energy from waste (EfW). (See CIWM Journal Online story)

Dr Hogg said: “If there’s one thing you’d expect a group of bankers to be able to do right, it’s their sums. Had they got the interest rate wrong on their investments, heads would roll. But there doesn’t seem to be the same concern over a serious flaw in their investment appraisal approach.

“No-one will thank the GIB when the only obstacle to having decarbonised the electricity grid is the incinerators they built under the guise of being green. In 20 years’ time these facilities will still be producing energy – and by that time, the carbon intensity will be almost ten times the grid average.”


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