Balfour Beatty, a UK-listed infrastructure construction company, is using its corporate venturing unit to provide half of a £24.8m ($40m) equity investment to form a local start-up to use recovered wood as a source of energy to homes.
Balfour Beatty Investments, formerly known as Balfour Beatty Capital Group and a provider of public-private partnerships for construction projects, is investing £12.4m in Birmingham Bio Power. The other half is coming from UK Waste Resources and Energy Investments, a venture capital fund managed by Foresight Group and backed by the UK Green Investment Bank (GIB), a for-profit bank created and funded by the government in November last year but managing £3.8bn independently of it.
GIB is indirectly investing £6.2m through the Foresight-managed fund and also directly investing £12m by way of preferred loan stock in Birmingham Bio. Fund managers Eternity Capital Management and GCP Infrastructure Fund (GCP) are investing the final £6.2m and £11m, respectively, as preferred loans to take the total to £47.8m.
The money will help build a 10.3MWe recovered wood gasification venture in the UK expected to start producing electricity in 2016 by using gasification technology from US-based Nexterra to convert recovered wood into a gas which is used to raise steam to be passed through a turbine. The plant (pictured) is being developed by Carbonarius, a joint venture between technology developer O-Gen and property firm Una Group.
Over its expected 20-year lifetime, the new plant is forecast to supply enough renewable energy to power 17,000 homes each year and is expected to deliver a reduction in greenhouse gas emissions of around 2.1 million tonnes of carbon dioxide (CO2) equivalent, and to save around 1.3 million tonnes of wood from landfill.
Shaun Kingsbury, chief executive of GIB, said: “I’m pleased the Green Investment Bank has been able to support the first gasification plant of its kind in the UK and hope it offers a positive demonstration effect that others will follow.”