£90 million offered to ‘refinance’ AD projects

Privilege Finance and Investec Bank plc yesterday (18 August) announced a “long-term partnership” which will make £90 million available to UK anaerobic digestion (AD) projects.

Privilege Finance says it has already deployed more than £500 million to build 40 AD facilities

In a statement, investment fund Privilege Finance said in excess of £30 million in funding had already been “arranged”.

The funding will be offered to Investec’s existing AD customers to “refinance” their projects as they start operations.

Andrew Vernau, chief financial officer at Privilege Finance, said: “The coming together of two experienced players in the renewable energy arena with 20 years of combined experience in AD finance and a shared vision to turn the tables on climate change promises to accelerate the growth of new AD projects and their contribution towards driving down carbon emissions.”

Launched in 2001, Privilege Finance says it has deployed more than £500 million to build 40 AD facilities. These generate a combination of renewable electricity, heat and biomethane to produce more than 3.5GW of energy per day.

Investec says its power and infrastructure finance team has arranged or advised on more than £1 billion of funding for bioenergy projects in the past five years, including financing of a number of AD portfolios.

Stefan Rattensperger, from Investec’s Power and Infrastructure Finance team, said: “By using the funds from Investec to refinance projects after the initial project finance phase, Privilege Finance will be able to redeploy the money to allow investment in additional renewable energy or carbon reduction projects.”

Net zero

Mr Vernau said the production of renewable energy using AD technology would help drive the UK towards its net zero emissions target by 2050.

“AD technology is proven and well-established, but mainstream banks still view it as a relatively new concept” – Andrew Vernau, chief financial officer at Privilege Finance

“AD technology is proven and well-established, but mainstream banks still view it as a relatively new concept in the wider renewables sector,” he said. “It’s therefore incredibly encouraging to see it supported by a major financial institution like Investec who understands the reliability of the technology and has successfully structured and arranged financings in the sector.”

Earlier this week, the World Biogas Association (WBA) called on the AD industry “to scale up fast” in the wake of a landmark climate change report published by the Intergovernmental Panel on Climate Change (IPCC) (see letsrecycle.com story).

With the IPCC declaring a “code red for humanity”, the WBA’s chief executive Charlotte Morton said now was the time for AD to be “deployed around the world”.

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