Foresight backs £21m organic waste facility

Carmen Reichman
03 September 2012

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Foresight has committed ТЃ11m to special purpose vehicle TEG Biogas London.

The Foresight Environmental Fund (FEF) contributed £9m to the green waste project with the remaining £2m coming from the group's UK Waste Resources and Energy Investments Fund (UKWREI). The latter was matched by institutional fund Quercus Assets Selection, raising the equity to £13m.

Foresight's UKWREI fund has been appointed to invest £50m on behalf of government initiative UK Green Investments. Meanwhile, FEF received a cornerstone investment from the London Green Fund and was backed by a number of private investors.

TEG was introduced to Foresight by its debt provider LWARB when the project vehicle first approached LWARB's Waste Infrastructure Fund for investment.

TEG, which will construct and operate the plant, also received a share of the Mayor of London's £10m contribution to the development of infrastructure on the site.

A £7.9m senior debt facility was provided by the London Waste and Recycling Board (LWARB) and Investec Bank.

The project comprises an anaerobic digestion (AD) plant and an in-vessel composting (IVC) plant, as part of the Mayor of London's 60 acre London Sustainable Industries Park (LSIP). Work on the project is scheduled to begin in September with completion expected in Q1 of 2014.

Company
TEG's engineering, procurement and construction contract is expected to generate £16m in revenues over the construction period. Its operating and maintenance contract will yield £1.3m annually over a 15-year period.

The AD and IVC plants will be located on a 4.7 acre site, where they will process 49,000 tonnes of food and green waste per annum, generating 1.4MW of electricity to be used by LSIP's tenants. The plants will also produce digestate and compost for agricultural use.

TEG was founded in 1995 and started trading on the AIM in July 2004. The company's subsidiaries include TEG Environmental Limited and the Natural Organic Fertiliser Company Limited.

People
Nigel Aitchinson is a partner at Foresight Group. Mick Fishwick is CEO of the TEG Group. Wayne Hubbard oversaw the debt arrangement as COO of LWARB alongside James Donaldson of Investec Bank. Diego Biasi and Simone Borla are partners at Quercus.