10 August 2020 by Steve Eminton

Icon buys share in FCC’s energy from waste plants

A 49% share in FCC Environment UK’s energy from waste portfolio has been sold to investment group Icon Infrastructure.

The deal, at the end of July, both expands Icon Infrastructure’s role in the UK energy from waste market and also marks further involvement of investment funds generally in the marketplace.

The FCC plants include the Greatmoor energy from waste facility in Buckinghamshire, which opened in 2016

Icon Infrastructure has bought its 49% share via a newly formed company, Green Recovery Projects Ltd. This is a new entity created as a way to allow FCC sell the share in its energy from waste plants.

Icon explains that its investors include “renowned institutions from the UK, Europe, USA, Canada, Middle East and Asia”.

Enhance

FCC Group – Fomento de Construcciones y Contratas – the Spanish business which owns the UK operation, said the involvement of Icon would “enhance” FCC’s UK activities.

In a statement, the FCC Group said: “The deal for the stake in the head and owner of five Energy from Waste plants under FCC’s Environment division in the United Kingdom is worth £198 million, giving the company a value, when taken as a whole including its debt, of £650 million. The conclusion of the agreement is subject to the corresponding regulatory approvals.”

The statement continued: “The head of this area of activity, FCC Servicios Medio Ambiente Holding, will retain control over the new subsidiary and its full consolidation, in addition to 50% of the shareholding in the Mercia incinerator and 40% in the Lostock incinerator.”

The UK EfW plants are: Allington in Kent; Eastcroft, Nottinghamshire; Greatmoor, Buckinghamshire; Millerhill, Edinburgh; and Lincoln, Lincolnshire.

Icon Infrastructure’s assets also include a share in Selchp and three Midlands facilities

Funding

FCC Environment UK issued no statement regarding the sale of the 49% share leaving comment to its Spanish parent. However, it is thought that the deal is seen giving a boost to UK activities because of the funding received.

This stance was endorsed by FCC Group which commented that the involvement of Icon in Green Recovery Project “will help FCC to enhance its leadership position in the waste recovery sector in the United Kingdom and the development of new treatment plants, which are essential in succeeding in the ecological transition and enhancing the circular economy.”

Icon Infrastructure

For Icon Infrastructure, the deal means it now has a stake in nine energy from waste plants in the UK. In 2018. The company describes itself as “an independent investment firm that primarily seeks to invest in infrastructure firms, mainly in Europe and North America”.

Icon Infrastructure’s first investment in UK energy from waste is thought to have been in 2018. Then agreement was reached on the acquisition by Icon Infrastructure of a 48.75% share of CNIM Development’s interests in the south east London energy from waste plant, Selchp. Veolia is understood to hold the remaining shares in the Selchp facilility.

Also in 2018, Icon through a deal with CNIM, acquired a share in three “Midlands based assets” operated under PFI contracts with local authorities. Together, said Icon, these facility handle 400,000 tonnes of waste.

Investments

Recent months have seen other investment companies take a complete or part stake in UK waste management businesses that own energy from waste plants. A month ago global investment firm KKR completed its £4.2 billion acquisition of waste firm Viridor from Pennon Group. Viridor has a large energy from waste portfolio of about 11 plants.

In 2018 a consortium of investors bought Cory Riverside Energy which has a large energy from waste plant in London on the Thames at Belvedere.

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