Herbert Smith Freehills has advised Copenhagen Infrastructure Partners (CIP) on its acquisition and development of the Lostock Sustainable Energy Plant which, when operational, will be one of the UK and Europe’s largest energy-from-waste (EfW) plants.

The £480 million Lostock Sustainable Energy Plant project has been given the green light for construction by owners CIP (60 percent) and FCC Environment (40 percent) after the project reached financial close on 26 March 2019.

Headquartered in Denmark, CIP is a fund management company focused on energy infrastructure including offshore wind, onshore wind, solar PV, biomass and EfW, transmission and distribution, and other energy assets such as reserve capacity and storage. FCC Environment is one of the UK’s leading recycling and waste management companies. FCC became FCC Environment in 2012 when Focsa Services (UK) and Waste Recycling Group (both part of global infrastructure, environmental services and energy group FCC Citizen Services) came together under the new brand.

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Located in Lostock, north west England, the EfW plant will process 600,000 tonnes of waste per annum, which will contribute to the UK government’s strategy to reduce landfill and export of waste. With a capacity of 60MW, the Lostock facility will be among the biggest EfW plants in the UK as well as Europe and is expected to power roughly 110,000 homes, offsetting more than 200,000 tonnes of CO2 per year.

The plant will be built in land adjacent to Tata Chemicals’ and will be able to supply process steam to that company’s facilities. FCC Environment will be responsible for operating the plant as O&M and fuel supplier, and will source the 600,000 tonnes of waste that the plant will process each year.

The construction process will consist of two phases, starting with a 15-month enabling works programme followed by a three-year building phase including six months of commissioning. The plant is scheduled to commence operations in the second quarter of 2023.

The Herbert Smith Freehills team was led by energy partner Sarah Pollock and construction partner Tim Healey and included corporate partner Stephen Rayfield and real estate partners Will Turnbull and Catherine Howard. Emily Sykes, Samantha Scott, Jordan Bookman and Chris Davis formed the core associate team on the deal.

Sarah commented:

“We are delighted to have advised CIP on this strategically important investment in the energy-from-waste sector in the UK. We have been supporting CIP since 2012 and the opportunity to advise them on the Lostock Sustainable Energy Plant is testament to the firm’s expertise in renewables energy and in identifying and managing the legal and commercial issues that come with such complex projects.”

Herbert Smith Freehills previously advised CIP on multiple renewable transactions in the UK, including on its joint venture with Burmeister & Wain Scandinavian Contractor on the acquisition and development of a biomass-fired combined heat and power plant project in Kent, UK and the development and subsequent holdco refinancing of the Brigg and Snetterton straw fired biomass plants.