Estover announces successful financing of £138m Cramlington biomass CHP
Estover is pleased to announce financing for the Cramlington CHP project in Northumberland. £48m of equity has been committed by John Laing Group plc and the UK Green Investment Bank plc alongside £90m of debt from Barclays Bank plc, with an export credit guarantee from EKF.
The 27.7MWe biomass Combined Heat and Power (CHP) plant will power the equivalent of 52,000 homes and will reduce greenhouse gas emissions by the equivalent of taking 25,000 cars off the road per year.
Construction will commence immediately, with completion expected in late 2017. Once operational the plant will be fuelled by wood sourced from the local area.
Electricity generated will be sold via the grid as well as being supplied to local businesses. The plant will provide renewable heat to neighbouring manufacturers.
Estover is retaining an equity stake in the project, and a 12-year contract to provide ongoing general management, project & construction management services, as well as fuel management services for the project. This will be delivered by Estover's specialist Management Services business, which also services the Speyside CHP project in Moray, Scotland.
Marcus Whately, Co-CEO of Estover, said:
"This 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."
Max Aitken, Co-CEO of Estover, said:
“This demonstrates that Estover’s innovative approach to developing power projects is able to attract the highest quality investors. This is the second time that GIB and John Laing have invested in an Estover project and the first time Barclays has lent to a UK biomass project.”
Nial Gemmell, Director at Barclays Bank plc, said:
“With Barclays’ strong track record in supporting renewables projects we saw our part in such a high-profile project through the provision of debt finance as a natural fit. Working with GIB, John Laing Group and Estover to help deliver this deal further demonstrates our continued commitment to the UK renewable energy sector.”
Ross McArthur, Managing Director of Renewable Energy at John Laing Group plc, said:
“Our investment in Cramlington biomass CHP plant builds on the success of our partnership with Estover and GIB established on Speyside Renewable Energy plant. This exciting new project demonstrates the valuable contribution biomass can make to delivering renewable heat in the UK.
Cramlington adds further depth to John Laing Group’s growing portfolio of renewable energy assets in the UK and internationally.”
Ed Northam, Head of Investment Banking at the UK Green Investment Bank plc, 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.”