Oxfordshire anaerobic digestion (AD) specialist Agrivert has joined forces with Grundon Waste Management in a multi-million pound deal which provides funding for its third AD plant.
The agreement sees Grundon, which has its headquarters at Benson, near Wallingford and operations throughout the Thames Valley, providing £5 million as a shareholder loan, while the remainder of the £11m price tag for the development will be provided by SQN Capital Management, through its advisor Summit Asset Management via a senior debt facility.
Construction has already begun on Agrivert’s new plant, which is being built at Trumps Farm in Surrey. It is expected to be fully operational by Spring 2014 and when commissioned, will be capable of processing 50,000 tonnes of food waste and generating 2.3MW of renewable electricity, enough to supply around 4,000 homes.
AD is the Government’s preferred recycling treatment solution for food waste and the new plant will target local waste from Surrey and surrounding areas, processing both municipal and commercial waste.
Agrivert, whose head office is near Chipping Norton, is recognised as one of the UK’s leading design, own and operate AD companies, and managing director James Astor, said: “We are very pleased to have raised funding for this important project. We believe that Agrivert is extremely well positioned to take advantage of the significant opportunity in the UK AD market and are delighted to be maintaining the momentum of our AD plant rollout.”
Grundon’s investment marks a major drive into the food waste market – it recently launched a dedicated food waste collection service and, as deputy chairman Neil Grundon explains, the deal delivers a twin benefit for the company and its customers.
“We see a big future in food waste, which is why we have made this investment. We have a good working relationship with Agrivert and a real respect for its business, so we are delighted to be part of this exciting new project,” he said. “At the same time, our customers will benefit because having an AD facility closer to London means we can further extend the services we provide.”
Currently, food waste collected by Grundon is typically processed at one of Agrivert’s two existing AD plants at Cassington and Wallingford in Oxfordshire, where it is broken down into Biofertiliser and also used to produce Biogas, used as a fuel for the production of electricity and/or heat.
Since the launch of its new food service, Grundon has already seen volumes increase from 2,000 tonnes per annum (tpa) to over 6,000 tpa in the last four months, and that is likely to increase further as the company is expected to supply a significant quantity of feedstock to the new plant.
Despite the fact that every year the UK produces over 10 million tonnes of food waste, the country’s AD capacity for treating source segregated food waste is less than 1.5 million tonnes.
Agrivert successfully commissioned its first 2.1MW AD plant at Cassington in 2010, which was followed by a 2.3MW plant at Wallingford, officially opened on May 17 by Defra resource minister Lord de Mauley.
DC Advisory acted as financial adviser to Agrivert, and Addleshaw Goddard and Herrington & Carmichael provided legal advice to the shareholders.