The £1.4 billion contract between SITA UK and West London Waste Authority has been signed.
After being named preferred bidder in April, SITA UK has since managed to attract £20 million of funding from the Green Investment Bank with other debt financing coming from Credit Agricole Corporate & Investment Bank, Bank of Tokyo-Mitsubishi UFJ, Sumitomo Mitsui Banking Corporation and Mizuho Bank.
SITA UK will now begin work with its equity partners Scottish Widows Investment Partners and Japan’s Itochu.
Around 300,000 tonnes of waste per year will be handled and managed by SITA UK during the 25-year contract.
A new energy from waste plant will be constructed producing 33MW of electricity in Severnside, South Gloucestershire and residual waste from West London will be transported by rail to there. Construction of this facility will begin in December and it should open in 2016.
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.”
UK Green Investment Bank chief executive Shaun Kingsbury 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 private sector money, much of it from international investors.”