Lack of project finance will affect the Governments ambition to make anaerobic digestion an established technology in England by 2020, according to Catalyst Corporate Finance head of research Mark Wilson.
Catalyst Corporate Finance is a corporate advisory firm and specialises in company sales, private equity and acquisitions.
Wilson said: It is all very good and well the Government being supportive of AD, which we welcome. However, there is genuine concern about whether enough project finance will be available in the medium term to fund the rollout of so much anticipated AD capacity.
With contraction in bank funding expected to reach 15% in 2009, only the most convincing projects will be financed, unless the Government steps up its own funding commitments significantly.
Wilsons comments come after Environment Minister Jane Kennedy announced that the Government had plans to make the UK world leaders in AD technology and AD will play an important part in tackling climate change (see MRW story).
Wilson said that in the last 18 months there had been a significant rise in the interest in AD from its clients. He added that AD plants have demonstrated that they can compete strongly with other technologies such as gasification and that AD operators are recognised as dependable partners by food producers and councils.
But he said: Even if the funding is available, will there be enough capacity to construct these plants in the short term? The Government has already made huge PFI commitments to the waste industry, which will absorb construction capacity.