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WLWA signs £1.4bn deal with Sita consortium

A £1.4bn contract for recovering energy from waste has been signed between the West London Waste Authority (WLWA) and a consortium led by Sita UK.

The Public Private Partnership (PPP) deal over the next 25 years follows the announcement in April that Sita, along with its partners Scottish Widows Investment Partners and the ITOCHU Corporation, was WLWA’s preferred bidder.

The group will design, finance, build and operate infrastructure to manage up to 300,000 tonnes of residual municipal waste every year.

Waste generated by the 1.6 million people living in the London boroughs of Brent, Ealing, Harrow, Hillingdon, Hounslow and Richmond-upon-Thames will be taken by rail to the new Severnside Energy Recovery Centre (SERC) in South Gloucestershire, which already has planning permission.

WLWA says the 34MW facility will enable it to divert 96%of its waste from landfill. Preliminary construction work at Severnside is due to start in December and the facility is expected to be completed in 2016.

SERC will create 53 permanent jobs once built and is expected to employ approximately 200 people during construction.

Sita UK chief executive David Palmer-Jones said: “I am delighted that we have managed to reach financial close just over six months after being announced as preferred bidder, which is testament to the hard work of all involved. We now look forward to working with the authority to make best use of these valuable materials.”

The Green Investment Bank (GIB) is contributing £20m of the senior debt alongside a lending club of Credit Agricole Corporate & Investment Bank, Bank of Tokyo-Mitsubishi UFJ Ltd, Sumitomo Mitsui Banking Corporation and Mizuho Bank.

Shaun Kingsbury, GIB chief executive, said: “This is a model investment for us. Our mandate is to help mobilise significant sums of private money to invest in important UK infrastructure projects that are both green and profitable. With this project, every £1 of GIB investment brings £11 of other capital, much of it from international investors.”

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