Kier signs up to waste-to-energy JV
The investment in Biogen UK establishes a 50/50 joint venture with parent company Bedfordia Group.
Kier's total investment comprises a mixture of preferred and ordinary equity. £5.375m was invested on completion, with a further £2.5m of equity expected in December and another £2.5m in July 2013. The remaining £14m will be invested in instalments over the next four years to finance new anaerobic digestion (AD) plants. It expects to be operating nine plants by 2017, with a return on capital exceeding 15%.
Biogen designs, builds and operates large-scale AD plants to process food waste and produce renewable energy. It currently owns and operates two large commercial AD plants in the UK, both of which are included in the joint venture.
According to a statement from Kier, there is significant demand for new AD plants across the UK, with 7 million tonnes of food waste being produced per annum and current AD capacity of only 2.5 million tonnes, resulting in a need for a further 100 plants.