£250 million refinancing of two UK biomass plants

Copenhagen Infrastructure Partners (CIP) has completed refinancing worth £250 million (€280 million) of its interest in two biomass power plants in the UK.

According to a CIP statement, the fund has provided equity, preferred equity and senior debt for the development and construction of the two biomass power plants. The two facilities have now come into operation and senior debt has been sourced from third parties to refinance CIP’s initial investment.

The £250 million in financing is delivered by a combination of banks and institutional investors, confirming the commercial viability and attractiveness of biomass power plants to the broader debt markets.

Royal Bank of Scotland, Investec, Aviva Investors and one other, undisclosed major institutional investor acted together as lenders on the refinancing.

“We are focused on investing in green field energy projects and the completion and subsequent refinancing of these two first biomass plants in our portfolio is an important milestone for us,” said Rune Bro Róin, Senior Partner at Copenhagen Infrastructure Partners K/S.

“We are delighted to have received the support of the broader debt markets. We are grateful to our current lenders that engaged in this transaction and we are committed to continue building strong relationships with them and will continue to explore debt capital market opportunities.”

The plants, at Snetterton and Brigg, generate clean energy from variable fuel mixes co-firing straw with, for example, rape, miscanthus and woodchips. Combined, the two plants produce energy equivalent to the consumption of 152,800 households, saving 550,000 tonnes of CO₂ a year.

Sarah Wall, Senior Portfolio Manager, Alternative Income Solutions, Aviva Investors said: “We were very pleased to work with CIP on this investment, which provides a good match for the strong demand we see from pension funds for assets that deliver reliable, long-dated cash flows with appropriate risk-adjusted returns. We were able to offer a bespoke debt structure to finance the project, helping CIP tailor the financing structure to their needs.”

Briggs REP is a 40MW straw fired biomass plant situated in Lincolnshire. The plant was successfully completed and commenced operations in January 2016 – three months ahead of schedule. Snetterton REP is a 44MW straw fired biomass plant situated in East Anglia in UK. It reached completion in April 2017 – one month ahead of schedule. Snetterton is accredited for 1.4 ROCs.