Green bank funds help secure £750m ‘energy from waste’ deal

WASTE group Shanks yesterday struck a £750 million deal for a recycling and energy project for a local council, one of the first major schemes to be backed by the Green Investment Bank (GIB).

Under the 25-year private finance initiative agreement, Shanks and Wakefield Council have agreed the contract for the anaerobic digestion plant in West Yorkshire which will process household waste.

The project has been supported by £30.4m in funding from the Edinburgh-headquartered GIB which opened in November with £3 billion of backing from the UK government.

Barclays, German bank BayernLB and the Japanese bank Sumitomo Mitsui Banking Corporation are also providing support for the project.

Shanks, which was founded in Glasgow in the 1880s as a building company, said the plans for the plant in South Kirkby, which will power about 3,000 homes, are set to create some 250 jobs during construction and a further 60 permanent posts.

The facility will process up to 230,000 tonnes of waste each year and will help the council divert 90 per cent of waste away from landfill.

Under the contract, Milton Keynes-based Shanks will also take over a network of household waste recycling centres.

GIB chairman Lord Smith of Kelvin said: “Each year the UK generates approximately 190 million tonnes of waste, which causes environmental damage and costs businesses and consumers money.

“The GIB is committed to reducing the amount of waste which goes to landfill, supporting the UK in its transition to a low carbon economy, whilst driving a commercial return for the bank.” The GIB has already committed about £8m to a similar scheme in Teesside.

Shanks, which reported an annual turnover of £750m last May and employs more than 4,000 people, said it would also build a visitor centre to promote waste education.

Chief executive Peter Dilnot said the facility would help the council make more from the waste it produces by increasing recycling, generating energy and producing compost for land remediation and use by residents.

“We are excited that the Green Investment Bank has chosen this project as one of its first major investments,” he said.

Shanks and Energen Biogas operate an existing anaerobic digestion plant in Cumbernauld. Last year, Marks & Spencer signed a deal to buy electricity generated at the plant, enough to power 33 of its Simply Food shops.

Shares in Shanks closed up 4.75p, or 5.3 per cent, at 94.75p.

• Sir Adrian Montague, deputy chairman and senior independent director of the GIB, has been appointed as a non-executive director at insurance giant Aviva.