US-based renewable energy company Intrinergy and European waste management company Shanks Group have closed €34m in debt financing from German renewable energy bank NORD/LB to start construction of Belgium-based biomass energy project Intrinergy VARE Holdings.
A finance package drawn up by Intrinergy and NORD/LB will cover approximately 80 per cent of the project with senior, secured non-recourse debt. Intrinergy and Shanks have invested the outstanding capital and will operate the project as a joint venture.
The joint venture between Shanks and Intrinergy will provide long-term supply of biomass feedstock for the project. Shanks, through its Foronex subsidiary, will manage the biomass feedstock consumed by the project and together with Intrinergy will jointly market the wood pellets.
The plan includes the greenfield development of a combined heat-and-power plant and a wood pellet manufacturing facility. The CHP plant is designed to generate up to 12 MW of process steam and almost five MW of electrical power. The balance of renewable electricity will be sold under a long-term power purchase agreement and will generate Green Certificates, the equivalent of Renewable Energy Certificates used in the US.
Heiko Ludwig, the head of energy – Europe of NORD/LB, said, ‘In addition to our confidence in the parties involved and the solid business model and financial structure we have developed together, the renewable energy focus helps us reinforce NORD/LB’s commitment to the environment and sustainability.’
John Keppler, CEO, Intrinergy, added, ‘At a time when the credit markets are tightening, we are delighted to be able to close on this transaction and extend Intrinergy’s renewable energy franchise across Europe. I believe this deal speaks to the power of Intrinergy’s ability to create investment grade opportunities in energy and the environment.’
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