29 Apr 2014
The UK Green Investment Bank (GIB) has announced that the first project that it invested in, via its Foresight-managed fund, has been completed on time, within budget and is generating power. The TEG Biogas plant in Dagenham was officially opened on 23rd April, by Secretary of State for Business, Innovation and Skills, Vince Cable MP.
The plant is London’s first commercial-scale anaerobic digestion and composting facility. It has been constructed, and is being operated and managed, by TEG Group plc, the AIM listed green technology company which develops and operates organic composting and energy plants. The TEG Group is now providing on-going operating and maintenance services to TEG Biogas under a 15 year contract.
Situated on a 4.7 acre site owned by the Mayor of London and within his 60 acre London Sustainable Industries Park (LSIP) in Dagenham, the plant has the capacity to process up to 50,000 tonnes, per annum, of food and green waste. Much of the waste, which could have otherwise gone to landfill, will come from households and businesses across London.
It will produce 1.4MW of renewable electricity each year, which is being sold to the National Grid. It will also produce 14,000 tonnes of compost and 36,000 tonnes of digestate each year, for agricultural use.
Residual heat produced by the plant will amount to 1.15MW and will be used by the plant’s nearest neighbour Closed Loop Recycling, the world’s first food grade PET and HDPE plastic bottle recycling plant.
GIB’s first investment, via its Foresight-managed fund UK Waste Resources and Energy Investments (UKWREI) fund, was announced in late 2012. Foresight played a pivotal role in the transaction, providing capital from two of its managed funds and structuring the deal.
The UKWREI fund, in which GIB is the cornerstone investor, made a £2m equity investment in the project, while Foresight Environmental Fund (FEF) led the project with a £9m equity investment. FEF is a £60m fund targeting waste infrastructure projects within Greater London, cornerstoned by the European Investment Bank and the London Waste and Recycling Board (LWARB) through the London Green Fund (LGF) alongside several institutional and private investors. The remaining £2m of equity was provided by private sector investors. Senior debt of £7.9m was provided by Investec Bank plc and LWARB.
Shaun Kingsbury, Chief Executive, UK Green Investment Bank, said:
“This project is an important first for London and provides a positive demonstration of a fully integrated renewable energy and waste management project. The anaerobic digestion and composting facility will see waste, which could have been sent to landfill, now being used to create renewable energy and heat as well as compost and digestate for the agriculture sector.
“I congratulate Foresight and TEG on bringing in the project on time and within budget.”
Secretary of State for Business, Innovation and Skills, Vince Cable MP, said:
“This plant provides a cutting edge, environmentally friendly way to manage London’s waste and generate power. That is why it is so pleasing this was the very first investment made by the Green Investment Bank back in 2012.”
The Mayor of London, Boris Johnson said:
“I welcome the opening of this fantastic new project. It is great news for the local area and it shows that the London Sustainable Industries Park can deliver low carbon energy, jobs, innovation and growth for London.”
Mick Fishwick, CEO of TEG Group plc commented:
“I am delighted to see the Dagenham plant completed on time and on budget and that it has now been passed across to its owners. This project once again demonstrates TEG’s ability to take a plant from the drawing board to full commercial production and we look forward to operating and maintaining the plant for the coming 15 years, while we continue to develop and build further UK based IVC and AD plants”.
Nigel Aitchison, Partner and Head of Environmental at Foresight Group added:
“We are delighted to see the plant commissioned, which will see 50,000 tonnes of organic waste matter from Greater London diverted from landfill every year and in addition to producing over 2.5 MW of renewable energy. We see the TEG plant as a model for what can be achieved in sustainable infrastructure which allows waste management to be transformed into resource management. We look forward to making announcements of further investments, which will drive both growth and job creation in this important sector in Greater London and across the UK in the very near future.”
The Mayor’s London Sustainable Industries Park has been designed to create a cluster of environmentally focused enterprises such as low-carbon energy from waste plants, innovative waste facilities and other CleanTech infrastructure (such as recycling, renewable energy, wind power, solar power, biomass).
The TEG Group joins Closed Loop, an expanding plastic recycling business, on the Park, with two further sustainable energy from waste businesses due on site in the next 12 months. The Institute for Sustainability will launch their Cradle to Cradle demonstrator and ‘Living Lab’ – exploring residential sustainability approaches and energy and water efficiency innovations – alongside the Mayor’s Climate Energy Homes designed Hub/ Security building at the Park over the summer.
Story appears courtesy of Green Investment Bank