NatWest fuels Biffa’s green strategy to produce clean energy

Biffa Plc is at the forefront of the UK’s waste industry. The Buckinghamshire-based company is the UK’s leading industrial and commercial waste collection service provider with 95% postcode coverage. Its operations employ 8,000 staff and cover the entire breadth of the waste management process including collections, recycling, treatment, disposal and energy generation.

Biffa understands the important role it plays in helping the UK address the climate emergency while delivering sustainable growth. As such, the company has established an ambitious investment programme in green economy infrastructure and low carbon collections. One component of the infrastructure investment is the delivery of two Energy-from-Waste (EfW) plants. EfW is a safe technology that reduces waste being sent to landfill (and therefore reducing harmful methane emissions) while generating clean energy from the process. There are currently c. 50 EfW plants in operation around the UK, which combined export an estimated c. 6,700 GWh of electricity.

NatWest at Biffa’s side to help achieve strategic financing aims for the delivery of green economy projects

Over the past seven years NatWest and Biffa have intensified their partnership, both committed to driving forward the UK’s transition to a zero-carbon economy.

Biffa have utilised NatWest’s breadth of financing and advisory capabilities to achieve their financing aims, which includes tapping into specific areas of NatWest’s expertise to expand their EfW infrastructure. Here, the market leading NatWest Project Finance team have supported the delivery of two major EfW projects in 2020 (outlined below), which represent a combined 750,000 tonnes per annum of robust, proven and reliable capacity.

Newhurst and Protos EfW plants will help UK achieve self-sufficiency in managing waste

In June 2020 Biffa – together with joint venture partners Covanta Holding Corporation (Covanta) and Macquarie’s Green Investment Group (Macquarie GIG) – commenced construction of a new EfW facility in Newhurst, Leicestershire. Only a few months later Biffa, together with the same consortium, have also successfully reached financial close of its second EfW plant, the Protos Energy Recovery Facility located in Cheshire which closed in December 2020. 

The Newhurst plant, which is expected to be operational in summer 2023, will process up to 350,000 tonnes of waste a year and will generate up to 42MW of low carbon electricity. This is enough to power around 80,000 UK homes, while also offsetting 245,000 tonnes of CO2 emissions, compared to disposing of the waste in landfill. Biffa, which owns 50% of the new plant, will provide 70% of the plant’s waste capacity sourced from its existing local waste collection services; and Covanta – which together with Macquarie GIG owns the other 50% – will provide technical oversight during construction in addition to operations and maintenance of the facility.

The Protos plant, located near Ellesmere Port in Cheshire within the Protos energy and resource hub, will treat up to 400,000 tonnes of waste every year and will generate 49MW of low carbon electricity annually. This is enough to power a further 90,000 UK homes, while also offsetting 280,000 tonnes of CO2 emissions, compared to disposing of the waste in landfill. Covanta and Macquarie GIG each own 37.5% of this facility, while Biffa, who will provide 61.25% of the plant’s waste capacity, owns the remaining 25%.

NatWest supports EfW joint ventures with Project Finance as well as FX, interest rate and inflation hedging solutions

To help deliver the financing packages for both EfW projects, the consortium comprising of Biffa, Macquarie GIG and Covanta, turned to their banking partner NatWest. The total debt financing requirements for both projects added-up to over £500million, whereby NatWest acted as one of the Mandated Lead Arrangers on each Project alongside a club of lenders to support the financing. In addition to lending, the NatWest Markets team advised and delivered on all aspects of the hedging requirements which included foreign exchange, interest rate and inflation hedging.

Protos and Newhurst marked NatWest’s fourth successful financing deal with a Covanta/Macquarie GIG joint venture and the second transaction with the collective consortium which included Biffa. These 2020 transactions follow NatWest financing the development of the Rookery and Earlsgate EfW plants in 2019, further reinforcing NatWest’s leadership in the sector and highlighting NatWest Group’s commitment to provide an additional £20billion of Climate and Sustainable related finance by 2022. Furthermore, NatWest Group has pledged to make its own direct operations climate positive by 2025 and to at least halve the climate impact of its financing activity by the end of this decade.

NatWest and Biffa partnership delivers major green milestones

Commenting on the Newhurst and Protos transactions, Sean Malone, Head of Corporate ＆ Institutional Structured Finance, NatWest, said: “We’re excited to have helped our long-standing customer to reach another two major milestones, and we’re looking forward to continue supporting Biffa in all financial aspects of their strategic objectives.“

Bruce Riley, Head of Project Finance, NatWest, stated: “We’re delighted to have supported the Biffa, GIG and Covanta consortium with the financing of the new Newhurst and Protos EfW plants. Sustainability is of paramount importance to our business, our customers and the economies we operate in, and we continue to support those on their journeys towards sustainable operations and those, such as Biffa, helping others to become more sustainable.”

Michael Topham Chief Executive, Biffa, commented: “We are pleased to have reached two major milestones together with NatWest, securing the financing for our two EfW projects within a year. The construction of our Newhurst and Protos plants mark another crucial step towards improving the UK’s waste infrastructure and creating a low-carbon and resource-efficient economy.” 

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