Anaerobic digestion (AD) developer Tamar Energy has secured a £32m non-recourse project finance loan from the Royal Bank of Scotland (RBS).
Tamar claims it is the first time that such a financial arrangement, under which the debt is secured by the project’s revenues but not its assets, has been used in the AD industry.
The seven-year term facility will refinance the five current Tamar Energy plants at Basingstoke, Holbeach, Retford, Halstead and Hoddesdon.
The loan will be used to build the next wave of facilities from Tamar’s development pipeline. The company has recently secured permission to build a sixth plant at Bromley, Kent.
Willie Heller, chief executive, said: “This is a springboard to our next phase of growth, and demonstrates the increasing maturity of the commercial-scale AD sector. It provides us with the resources and flexibility to consider all opportunities for growth as we continue to build out our project pipeline.”
Sue Milton, director at RBS, said: “This is a landmark transaction, and RBS is delighted to have worked with Tamar’s management team to provide the initial funding to support the company’s growth ambitions.”
Energy and climate change minister Amber Rudd said: “With AD developers now being recognised as worthwhile investments in their own right, without the need for additional assets to raise financing, this is an exciting moment for the industry.”
In January, Tamar Energy signed a long-term power purchase agreement with EDF Energy for its first five AD plants. The Basingstoke and Holbeach AD facilities started on the PPA terms in December 2014 and the other plants will follow in 2015.