UK Green Investment Bank plc (GIB) and John Laing Group plc have committed £48m of equity to a new £138m renewable energy facility in North East England, developed by Estover Energy.
The biomass Combined Heat and Power (CHP) plant in Cramlington, Northumberland, will generate 213 GWh of renewable electricity annually – enough to power 52,000 homes. It is also expected to reduce greenhouse gas emissions by circa 56 kt CO2e annually, the equivalent of taking 25,000 cars off the road during its lifetime.
Much of the generated electricity will be purchased by Statkraft under a long-term Power Purchase Agreement (PPA), but the area’s thriving pharmaceutical sector, recognised as an essential element of the North East economy, will benefit from its output.
Ed Northam, Head of Investment Banking at the UK Green Investment Bank, said: “The Cramlington plant promises to create local jobs, support an industry whose vitality is essential to the growth of the regional economy and help cut UK greenhouse gas emissions while promoting the country’s adoption of green energy sources”
Electricity will be supplied to local businesses operating in the adjacent industrial estate, namely Aesica Pharmaceuticals and MSD. The plant will also have the potential to provide renewable heat to neighbouring facilities.
GIB will make a £21m investment in the project, with John Laing investing in a stake worth £27m. Barclays will provide the remainder of the funding as debt, 60% of which will be guaranteed by the Danish export credit agency EKF.
The construction of the plant will be undertaken by a consortium of Burmeister & Wain Scandinavian Contractors A/S (BWSC), the consortium leader, and Burmeister & Wain Energy A/S (BWE). BWSC will operate the plant upon completion under a 12-year Operations & Maintenance contract. Up to 25 permanent positions will be maintained at the operational facility, with further jobs created within the project supply chain.
Fuel for the plant will be provided by local growers and forest industry suppliers.
Ed Northam, Head of Investment Banking at the UK Green Investment Bank, said: “The Cramlington plant promises to create local jobs, support an industry whose vitality is essential to the growth of the regional economy and help cut UK greenhouse gas emissions while promoting the country’s adoption of green energy sources.”
Marcus Whately, Founder and Co-CEO at Estover Energy, said: “Nearly £140m invested in the Cramlington CHP plant is fantastic news for the North East and for Estover. It means more jobs in forestry, and a secure energy supply for industry. Twice the size of our first plant in Scotland, it shows Estover is becoming a real force in these long-term energy and infrastructure projects.”