The government-funded UK Green Investment Bank (GIB) has announced that it is investing £33 million in the Allerton Waste Recovery Park in North Yorkshire, despite government pulling private finance initiative (PFI) funding from the project last year.

The public-private partnership (PPP) between North Yorkshire County Council and City of York Council alongside sponsors AmeyCespa, Aberdeen UK Infrastructure Partners (a fund managed by Aberdeen Asset Management) and Equitix will receive long-term loan financing and an equity bridge loan.

The money will be provided by GIB alongside investment from Nord/LB, Sumitomo Mitsui Banking Corporation, Siemens Bank, KfW-IPEX and the European Investment Bank (EIB). This is the first joint-investment between GIB and EIB.

Allerton treatment plant details

Set for development in an existing landfill and quarry site in Allerton, the project is expected to process up to 320,000 tonnes of household, commercial and industrial waste per year.

This will include all of the residual waste from North Yorkshire County Council and the City of York, with the remaining capacity of the plant used to process commercial and industrial waste sourced by AmeyCespa.

The technologies utilised by the park will be:

• mechanical treatment, which will screen out organic matter and recover metal, paper and plastic for recycling;
• anaerobic digestion (AD), which will break down the separated organic waste into biogas, which will be used to generate around 1.1 megawatts (MW) of renewable power;
• incineration, which will heat the remaining waste to produce steam to feed an electricity generating turbine that will generate around 24MW of power. Spare heat produced by the process could be supplied to local external customers if a market can be established; and
• incinerator bottom ash (IBA) recovery, which will process residual material from the incineration plant into an aggregate that can be used in construction.

Shaun Kingsbury, Chief Executive of UK GIB, said: “This innovative project is a best-in-class example of how local authorities can improve recycling and generate significant amounts of renewable power from household waste. GIB is proud of its track record supporting innovation in the waste and recycling sector and particularly pleased that this impressive facility is the first to feature the full complement of waste treatments and new technologies.”

Allerton Park background

The park has had a tempestuous history to date, as there were many criticisms voiced by local residents over the proposed plant being ‘too big’, concerns over traffic congestion and local property devaluation. However, despite these concerns, the recovery park received planning consent from the county council in October 2012, and, following a commitment from the Department for Environment, Food & Rural Affairs (Defra) to provide £65 million of PFI credits to the project, was scheduled to open in 2015.

However, the plans were put on hold in February 2013, when Defra announced that it was withdrawing PFI funding from three energy-from-waste projects, including Allerton Park, after finding that the 29 projects that already had funding were ‘sufficient’ to meet the EU’s 2020 landfill diversion targets.

After voicing its ‘complete surprise’ at the decision, which reportedly was taken without consultation with the county or city council, a judicial review application was submitted to the High Court in May 2013, on the grounds that the withdrawal was not done ‘in the proper manner’. But, in January of this year, North Yorkshire County Council and York City Council dropped their legal case against the government, after concluding it would ‘not be in the public interest for the councils to continue to prosecute’ and would be ‘unlikely’ to change Defra’s decision.

AmeyCespa has now formally signed the contract to design, construct and operate the integrated waste management facility, making it the company’s largest waste project to date.

Construction of the facility is expected to begin in December 2014 and take 400 people approximately 36 months to complete.

It is expected that once the park becomes fully operational in 2018, 70 permanent jobs will be created.

GIB criticised for funding ‘dirty energy’

GIB’s decision to fund another waste incinerator is likely to meet with disapproval from environmental groups, which have previously criticised the bank for investing almost £200 million in ‘dirty’ energy projects in 2014, including large-scale biomass power stations and waste incinerators.

During a protest at the GIB’s first annual review, Oliver Munnion, Biofuelwatch Co-Director, said: “So far the Green Bank has given millions to big biomass and waste incineration plants – power stations that by their very nature burn carbon and release it into the atmosphere… It is unacceptable that dirty energy is being financed in the name of reducing carbon emissions.”

Find out more about the Allerton Waste Recovery Park.