Trash-to-Power Plans in UK Need $618 million – Advanced Plasma Power featured on Bloomberg.com

Advanced Plasma Power Ltd., a developer of waste-to-energy technology, is talking to as many as 15 investors to raise as much as 400 million pounds ($618 million) for projects that turn trash into power.

The London-based company is speaking to private equity investors and infrastructure funds in the U.K., U.S., Europe and the Middle East and already has three “agreements in principle” in place, Rolf Stein, chief executive officer of Advanced Plasma, said without elaborating in a phone interview.

Advanced Plasma is working with “a number of the leading” U.K. waste management companies he didn’t name to deliver as many as 10 projects that use waste from British homes and businesses to generate electricity and heat. The facilities are expected to have 160 megawatts of total capacity.

The U.K.’s goal is to get at least 15 percent of its energy from renewable sources by 2020, a sevenfold jump from 2008. The Department of Energy & Climate Change estimates as much as half the total figure may be generated from biomass, which includes wood chips, municipal waste and straw.

“We are hoping to attract 50 percent senior debt into the projects at financial close but this will be dependent on market conditions including Basel III constraints at the time of each close,” Stein said of the capital-adequacy rules.

“The Green Investment Bank could certainly have an important role to play here,” he said of the bank that will fund clean-energy projects, helping spur investment in the industry, and move the U.K. toward a lower-carbon economy.

Green Bank Pledge

Britain has pledged to put 3 billion pounds into the Green Bank that could leverage a further 15 billion pounds of private investment. The bank’s priorities through 2016 will include commercial and industrial waste processing, recycling and energy generated from waste. The bank needs European Commission approval before it can start, and should have full borrowing powers from 2015.

Financial closure for the first of Advanced Plasma’s projects is expected at the end of this year, and on all 10 facilities in two to three years, the executive said. The equity requirement for the projects could be less than 400 million pounds should earlier facilities be refinanced and later projects have a higher level of debt, he said.

The technology developer might consider an initial public offering next year, Stein also said. “Whilst I can’t speak for all shareholders, for the majority an initial public offering is unlikely to be an exit strategy at this time and we probably wouldn’t look to raise much money from it.”

A share sale would instead provide the company with liquidity to structure some “interesting” deals and perhaps some development capital. Advanced Plasma in May joined with Group Machiels to build a project at a landfill site in Belgium that will dig up underground trash and turn it into power. The company isn’t looking to pursue similar facilities in the U.K. as there’s “ample need” to first address the issue of diverting residual waste from landfill, Stein said.

“We do see landfill mining as an important part of the energy and resource landscape of the future however,” he said.

http://www.bloomberg.com/news/2012-01-19/advanced-plasma-s-trash-to-power-plans-in-u-k-need-618-million.html



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