TEG Group secures funding for London organic waste facility

The TEG Group has secured funding to construct a £21m organic waste facility at East London’s Dagenham Dock in the London Borough of Barking and Dagenham.

This will include central London’s first Anaerobic Digestion (AD) plant.

According to a statement, the new facility will be capable of processing 49,000 tonnes per annum of food and green waste via AD and In-vessel composting (IVC) technology on a 4.7-acre site on the Mayor of London’s 60-acre London Sustainable Industries Park (LSIP). The mayor has committed more than £10m for infrastructure development on this site, with the TEG scheme first to benefit.

The Dagenham facility will comprise a 30,000 tonnes per annum AD plant and a 19,000 tonnes per annum IVC plant. This will be the first AD plant in central London and will generate approximately 1.4MW of electricity, which will be used by the park’s tenants.

It will also produce more than 36,000 tonnes per annum. of AD digestate and 14,000 tonnes per annum of compost for agricultural use.

The feedstock will come from source segregated food waste and mixed food and green waste produced by local households, commercial and manufacturing enterprises.

Foresight Group has committed £11m into a new Special Purpose Vehicle (SPV), TEG Biogas (London) Limited, to allow for the construction and operation of the new processing plant.

The Foresight Environmental Fund (FEF) has led the project with a £9m investment. The FEF was cornerstoned by the London Green Fund (LGF), and has attracted investment from a number of private sector investors.

The LGF was launched in March 2011 by the Mayor of London, Boris Johnson, as part of London’s drive to encourage investment into waste and energy-efficiency infrastructure to create economic growth and jobs.

TEG will construct and operate the plant on behalf of the SPV under an Engineering, Procurement and Construction Contract (EPC Contract), which is expected to generate approximately £16m in revenues for TEG over the period of construction. 

Work is due to commence in September 2012, with completion scheduled for the first quarter of 2014.

In addition, TEG has been awarded an Operating and Maintenance Contract (O&M Contract) to operate the facility on behalf of the SPV. The O&M contract is for a 15-year term with annual revenue of approximately £1.3m per annum, escalated annually.