Preston-based anaerobic digestion operator TEG and joint venture partner Alkane Energy said they have received a bank offer to fund their proposed food waste-powered plant in North East Wales.
The £40m contract for Denbighshire, Conwy and Flintshire councils was announced in August and the financial terms of the deal were due to be completed by the end of the year. However, TEG said on Tuesday that financial close will now take place in quarter one of 2012. The name of the lender was not disclosed.
TEG and Alkane will create a joint venture company, to be called NEAT Biogas in which TEG will be a 70% equity holder and Alkane 30%. Under the contract, NEAT is planning to construct and operate a new 20,000 tonnes per annum AD plant to process the food waste supplied by the councils together with additional third party food waste. The initial contract will be for 15 years, with a potential five-year extension.
The council-owned former abattoir site in Rhuallt, on the Denbighshire-Flintshire border has been reserved for the AD plant. The build cost will be around £8m and contractors will be appointed following financial close of the TEG deal.
The facility will be an AD plant processing food wastes to produce electricity and a digestate product, for use as a fertiliser in agricultural applications. Annual revenues for the operating project are expected to reach £2m a year and the facility is expected to generate approximately 1MW of renewable power, sufficient to satisfy the needs of approximately 2,000 homes.
TEG also said a similar contract in Dagenham, London was progressing well. Mick Fishwick, chief executive, said: "In a very challenging financial market, we are delighted to have made such good progress in the execution of these two flagship projects. We look forward to both projects moving to completion and into construction in 2012."
Shares in TEG were unchanged at 8p, valuing the business at £9.69m.