Covanta Holding Corporation, Morristown, New Jersey, announced the financial closing of the Earls Gate Energy Centre with strategic development partner Green Investment Group (GIG), Edinburgh, United Kingdom. Covanta and GIG will each hold a 25 percent equity ownership in the project, with co-investor and developer Brockwell Energy, Glasgow, Scotland, owning the remaining 50 percent stake.
A combined heat and power facility located in Grangemouth, Scotland, Earls Gate is a well-structured project with long-term waste and energy contracts, Covanta says. Each year, the facility will prevent approximately 216,000 metric tons of mixed household, commercial and industrial waste that cannot be recycled from entering landfills. Instead, the waste will be used as fuel to generate low-carbon heat and power that will be supplied to a co-located industrial site host.
Construction of the facility will be led by Constructions Industrielles de la Mediterranee (CNIM), Île-de-France, France, which has deep experience in energy-from-waste construction, primarily in Europe and the United Kingdom, and is expected to take approximately 36 months to complete. CNIM will also provide operations and maintenance services when the project commences operations in late 2021. Covanta will provide technical oversight services during construction and operations.
“With today’s announcement, we mark our entry into the U.K. market alongside GIG, following on the heels of our very successful partnership on the Dublin project earlier this year,” Covanta President and CEO Stephen Jones says. “Earls Gate is the first of four advanced development projects in the UK to reach financial close, with the Rookery South, Protos and Newhurst projects lined up close behind. We are very pleased with our partnership with GIG and expect it to continue to add meaningful value as we bring additional projects to market. Our expectation remains that these U.K. projects alone will provide $40 to $50 million in incremental annual free cash flow to Covanta when they are all fully operational.”
Earls Gate Project and Covanta investment details:
- 216,000 metric tons per year of waste processing capacity
- 21.5 megawatt equivalent generation capacity
- 75 percent of the waste secured under long-term agreements
- 100 percent of electricity and steam output under a long-term agreement with industrial site host
- Total project cost of $266 million with approximately 70 percent financed through non-recourse project-based debt