Macquarie and MGT partner to build UK’s largest biomass plant

Macquarie has signed an agreement to support MGT Power in the financing of the 299MWe Teesside Renewable Energy Plant, which has received a UK Government-supported contract for difference (CFD).

The Teesside plant will be fuelled by wood pellets and chips from certified sustainable forestry sources in the United States and Europe, with regular audits to ensure compliance with strict sustainability criteria mandated by the CFD.

According to Macquarie, the plant will have a significantly smaller carbon footprint than its fossil fuel alternatives once production begins.

The £650 million investment required for the project is estimated to create at least 600 jobs during construction and sustain about 100 full time jobs once operational.

All major permits for the plant’s construction and operation have been secured and Macquarie has commenced a debt raising process, with financial close targeted for Q4 2015.

MGT is an independent UK power station developer focused on large-scale sustainable biomass projects.

Its management team has experience in UK and overseas power generation projects totalling c.15 GWe, and a long history in biomass supply and sustainable sourcing.

Macquarie is partnering with MGT to bring the plant project to financial close and will be its lead equity sponsor as well as financial advisor.

Macquarie has experience in the alternative energy and clean technology sector with a global portfolio of investments in offshore wind, onshore wind and solar amongst other technologies.

‘Following the sanction by the European Commission of the project’s CFD earlier this year, the involvement of Macquarie as an investor and adviser represents another major step forward in the process to finance the project with the aim of starting construction on site by early 2016 at the latest,” says Ben Elsworth, CEO of MGT Power.

Mark Dooley at Macquarie adds: ‘Macquarie is delighted to be partnering with MGT to bring this landmark project to fruition. As one of the first renewable energy assets to be project financed under the new UK CFD regime and the largest dedicated biomass project to be built in the UK, the project presents some challenges but also a great opportunity for the finance market.’

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