Financing innovative solutions to reduce the use of fossil fuels

News - 2/4/2019

By helping finance a biomass plant that produces electricity using water vapour from the combustion of plant matter, our infrastructure debt platform is contributing to the development of renewable alternative energy sources and to the energy transition.

In July 2009, the British government approved plans to build the Tees Renewable Energy Plant, set to be the UK’s largest biomass plant, in an effort to increase the use of renewable energy and reduce dependence on fossil fuels.

One source of funding used by the Macquarie group and Danish sovereign fund PKA for this £1.2-billion project was our infrastructure debt platform, as part of a club deal of mandated lead arrangers to set up debt financing. We contributed £55 million to the project.

Biomass is a promising source of clean, alternative energy

The development of biomass also makes an effective contribution to the energy transition and the circular economy. Such energy sources provide a response to dwindling natural resources and limit developed countries’ dependence on fossil fuels.

Biomass plants use a four-stage process. Biomass – waste wood in Teesside’s case – is burned in a combustion chamber (1). As it burns, it gives out heat which warms the water and turns it into steam, which is then sent to the turbines (2). The steam turns the turbines, which produce energy that is then converted into an electric current by an alternator (3). As it leaves the turbine, part of the steam is recovered to be used for heating, thus creating a cogeneration process (4).

The Teesside plant will burn around 1.1 million tonnes of wood pellets a year, mainly from waste recycled in Europe and the United States. In doing so, it will generate 299 megawatts of electricity, enough to power around 600,000 homes, and reduce the UK’s greenhouse gas emissions by 1.2 million tonnes a year, accounting for 5.5% of the UK government's annual objective.

In addition to its environment aspect, the project offers social benefits, creating 100 permanent direct jobs and 600 jobs linked to the building of the plant.

This flagship project for our infrastructure debt platform fully embodies our ambition to help finance innovative solutions to step up the energy and environmental transition in Europe. In each of our projects, we stay true to our commitment to socially responsible investment by financing the real economy and sustainable development.




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Document issued by: EDMOND DE ROTHSCHILD ASSET MANAGEMENT (FRANCE) 47, rue du Faubourg Saint-Honoré, 75401 Paris Cedex 08. Public limited company with a Management Board and Supervisory Board with a capital of 11,033,769 euros. AMF approval number GP 0400000015 - 332.652.536 R.C.S. Paris