The waste PFI will transform waste management in Coventry, Solihull and Warwickshire by diverting 427,000 tonnes of biodegradable municipal waste from landfill each year by 2020.
Warwickshire County Council programme manager for waste management Kalen Wood said: There is currently an energy-from-waste facility in Coventry, which is owned by Coventry and Solihull local authorities. Project Transform will be replacing this plant.
The boost in PFI credits will mean the project will soon go out for procurement.
Although the PFI proposal focused on a combined heat and power plant to replace the existing scheme, the final decision will depend on what the waste management firms believe will be the best solution for the three areas.
Project Transform could reduce CO2 emissions by 34,500 tonnes compared with the current scheme. This is equivalent to taking 10,800 cars off the road for a year.
The project is also expected to create 250 jobs during construction.