Macquarie Capital and Macquarie Commodities and Financial Markets have reached financial close on £900 million of funding for a 299MW biomass-fuelled combined heat and power plant on Teesside.
Developed by MGT Power, Tees REP is claimed to be the world’s largest new-build biomass plant. Construction is due to start imminently and be completed by 2020. The project is located on a brown-field site adjacent to the Tees Dock near Middlesbrough. The total construction cost is approximately £650 million, with a further £250 million raised for working capital and operating costs
Macquarie will own 50% of the equity in the project, with Macquarie Capital introducing Danish pension fund PKA as an equity co-investor and partner who will own the remaining 50% stake.
Macquarie Capital acted as financial advisor raising more than £650 million of senior debt and developed the commercial and fuel supply arrangements for the plant. Its Commodities and Financial Markets group is also providing a market based power purchase agreement.
Th the team said Macquarie and MGT had worked together for more than 18 months, and Macquarie had provided a development loan in mid-2015 to support MGT through the project’s later stage development.
Contractors on the Tees REP include:
· A turnkey contract for engineering, procurement and construction via a joint venture of Samsung C&T and Tecnicas Reunidas
· An operations and maintenance agreement with Fortum
· A fuel supply agreement with Enviva Wilmington Holdings, a joint venture between an affiliate of Enviva Holdings, LP and affiliates of John Hancock Life Insurance Company
· PD Ports, which will provide a dedicated berth for fuel deliveries as well as stevedoring services.