Macquarie reaches financial close on world’s largest new-build biomass project

Global financing firm Macquarie Group has reached financial close on £900 million (appr. €1.04m) of total funding for the Tees Renewable Energy Plant (Tees REP).

The 299MWe biomass combined heat and power plant, developed by MGT Power and located in Northeast England, will be the world’s largest new-build biomass plant.

Macquarie, partnering with MGT, has successfully commercialised, structured, and financed the project through development to financial close and construction is due to start imminently and be completed by 2020.

Macquarie will own 50% of the equity in the project, with Macquarie introducing Danish pension fund PKA as an equity co-investor and partner who will own the remaining 50%.

Macquarie also acted as financial advisor raising more than £650 million of senior debt and developed the commercial and fuel supply arrangements for the plant.

Ben Elsworth, CEO of MGT Teesside, said the project “had to overcome many hurdles” and it was successfully realised only through teamwork.

“This has been a huge team effort from many different parties over a long period, and we are proud to be delivering a project which is not only low carbon but which will meaningfully add to the UK’s energy security at an important time," Elsworth said.

Other partners in the project are, among others, Samsung and Tecnicas Reunidas, who will provide a fully turn-key contract for engineering, procurement, and construction and Fortum, with whim Macquarie and MGT have signed an operations and maintenance agreement.