UK Green Investment Bank (GIB) and John Laing Group have committed £48m of equity to a £138m renewable energy facility in the north-east, developed by Estover Energy.
The biomass combined heat and power plant in Cramlington, Northumberland, will generate 213GWh of renewable electricity every year, enough to power 52,000 homes.
Waste wood from forestry and low-grade wood recyclate will be used as feedstock, and the facility will create up to 25 positions in plant operations and 20 jobs in the supply chain.
A large share of the generated electricity will be purchased by Statkraft under a long-term power purchase agreement. Electricity will also be available for local businesses, such as drugs firms Aesica Pharmaceuticals and MSD, in the adjacent industrial area. There is also potential for the plant to provide renewable heat energy to neighbouring facilities.
GIB head of investment Ed Northam 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 to cut UK greenhouse gas emissions, while promoting the country’s adoption of green energy sources.”
John Laing managing director of renewable energy Ross McArthur said: “This exciting new project demonstrated the valuable contribution that biomass can make to delivering renewable heat in the UK. Cramlington adds further depth to John Laing’s growing portfolio of renewable energy assets in the UK and internationally.”
John Laing, Estover and the GIB have previously worked together on the Speyside renewable energy plant.
The bank will make a £21m investment in the project with John Laing putting up £27m. Barclays will provide the remainder of the funding as debt, 60% of which will be guaranteed by Danish export credit agency EKF.
Construction will be undertaken by a consortium of Burmeister & Wain Scandinavian Contractors (BWSC), the consortium leader, and Burmeister & Wain Energy. BWSC will operate the plant on completion under a 12-year operations and maintenance contract.