Green Bank backs waste energy plant

A major project to create energy from household waste - one of the first to be backed by the Government's new Green Investment Bank (GIB) - has been given the go-ahead.

Waste firm Shanks and Wakefield Council have agreed a 25-year private finance initiative (PFI) deal, worth £750 million, to build a recycling and anaerobic digestion plant in West Yorkshire.

The project has been backed by a £30.4 million investment from the Green Investment Bank (GIB), which opened in November with £3 billion of funding from the Government.

The bank has been set up as a public company to make a profit but with the aim of helping develop the green economy and attracting private sector capital for projects from offshore wind to waste and non domestic energy efficiency.

Barclays, German bank BayernLB and the Japanese bank Sumitomo Mitsui Banking Corporation are also providing funding for the Wakefield Council project.

Shanks said the plans for the plant in South Kirkby, which will power about 3,000 homes, are set to create about 250 jobs during construction, and a further 60 permanent jobs.

GIB chairman Lord Smith of Kelvin said: "Each year the UK generates approximately 190 million tonnes of waste, which causes environmental damage and costs businesses and consumers money.

"The UK Green Investment Bank is committed to reducing the amount of waste which goes to landfill, supporting the UK in its transition to a low carbon economy, whilst driving a commercial return for the bank."

Shanks said the facility will process up to 230,000 tonnes of waste each year and will help the council divert 90% of waste away from landfill. Under the contract, Milton Keynes-based Shanks will also take over a network of household waste recycling centres.

The group, which reported an annual turnover of £750 million last May and employs more than 4,000 people, said it would also build a visitor centre to promote waste education. The GIB has already committed about £8 million to a similar scheme in Teesside, which was announced in November, when the GIB was officially launched.