Shareholders
The Green Investment Group had a 50% stake in the four projects and the move strengthens Covanta’s ownership. However, other shareholders exist for some projects, including Rookery South in Bedfordshire in which Veolia has a share.
The other three projects are: the Newhurst energy recovery facility in Shepshed, Leicestershire; Protos at Grinsome Road, Chester; and in Scotland, the Earls Gate Energy Centre in Grangemouth.
In a statement, EQT said “the purchase price and follow-on equity requirements to finalise construction will be funded by EQT Infrastructure.
“The acquisition is a key enabler to streamlining operations across all of Covanta’s UK facilities. It is also an opportunity to consolidate Covanta’s contribution of thermal recycling to UK circular economy targets and drive for sustainable waste processing of non-recyclable waste aligned to the waste hierarchy.”
And, the ambition of Covanta to grow in Europe – the business has American roots – was emphasised by the company. It noted that EQT will “accelerate Covanta’s journey in Europe towards becoming a leading sustainable provider of waste management services.”
Delighted
Owen Michaelson, CEO and president of Covanta Europe, said: “We are delighted with EQT’s support for Covanta’s next phase of growth. The acquisition will simplify the UK operations and increase our contribution to end-of-line waste for thermal recycling.
We continue to see significant opportunity in the UK to offer sustainable solutions
“This is a great opportunity to build on the positive momentum in Covanta’s European operations after successfully bringing the Rookery South Energy Recovery Facility into operations in January, safely delivered on time and on budget, despite the challenging conditions resulting from COVID-19 and Brexit. We continue to see significant opportunity in the UK to offer sustainable solutions to growing waste challenges, and the enlarged platform will provide a unique chance to develop new opportunities over the coming years.”
The transaction is subject to approvals and is expected to be finalised by June 2022.
Timelines
Of the four plants, Rookery South near Bedford is operational. In 2023 the Newhurst plant in Leicestershire is due to come online with Protos, Chester following. Dates for the completion of Earl’s Gate are still to be confirmed, the plant has to resolve construction issues in the wake of contractor CNIM UK going into administration.
This is greenwash – and should not go without criticism: “…Covanta’s contribution of thermal recycling to UK circular economy targets…” – the use of the term ‘thermal recycling’ seems to be a poor attempt to hide the fact that incineration is a leakage from the circular economy to be minimised and ultimately eliminated. UK’s circular economy requires a UK without incineration…