The new facility at Stud Farm in Rufford will use poultry litter, straw, and other agricultural feedstock from adjacent farms to fuel a combined heat and power plant, which will supply electricity and heat to local businesses. Any surplus electricity will be supplied to the UK grid.
The project has secured funding of £6.6 million from the Foresight-managed Recycling and Waste (RAW) Fund, in which UK Green Investment Bank (GIB) is a cornerstone investor. SQN Asset Finance Income Fund has matched that sum to take the total investment in the project to £13.2 million.
Construction of the plant, which is being developed by Future Biogas Limited, is currently underway, and is expected to generate approximately 16,300 MWh of renewable electricity each year. It is expected to cut greenhouse gas emissions by approximately 6,900 tonnes of CO2 equivalent per year for the lifetime of the project.
The plant will also generate 16,000 tonnes per year of a recycled digestate bi-product, to be used as compost on local farms. All of the facility’s feedstock will be sourced locally.
GIB head of investment banking Edward Northam said: “Anaerobic digestion is widely recognised as one of the most effective ways of processing organic waste. AD facilities have an important role to play in the development of a circular economy in the UK.”
Foresight partner Nigel Aitchison said: “At Foresight we are continuing to find attractive small-scale AD projects that are making a lasting difference to the communities they serve while generating attractive returns for our investors.”
SQN Capital Management managing director Neil Roberts said: “Since the SQN Fund’s IPO in July 2014, renewable projects have formed a meaningful part of our diversified portfolio.
“This is our fourth joint financing with the RAW fund which fit well with our key investment criteria of financing business essential, revenue earning assets with high in place value.”