Pinsent Masons Advises on £160M Glasgow Waste Deal

06 Aug 2012 | 01:26 pm | 2 min. read

International law firm Pinsent Masons has advised Viridor (Glasgow) Limited - a subsidiary of Pennon Group Plc - on the 25 year Glasgow City Residual Waste Treatment Services Design, Build, Finance and Operate ('DBFO') contract with Glasgow City Council.

The contract requires the recycling and treatment of Glasgow's residual municipal waste through the financing, construction, and operation of a new Recycling and Renewable Energy Centre at the Council's own site in the south of the city. The contract requires the treatment of between 175,000 and 200,000 tonnes p.a. of waste and is designed to achieve around 90% landfill diversion.

Viridor's stated strategy involves the fulfilment of long-term service contracts, and the construction and operation of recycling plants and of plants generating energy from the residual waste which cannot be recycled. The Glasgow Centre will comprise advanced facilities for recycling, anaerobic digestion and energy recovery by gasification, and it will make a major contribution on behalf of the City of Glasgow towards Scotland's ambitious Zero Waste Plan.

The contract is subject to Viridor's gaining planning permission to build the plant. Viridor expects to make a planning application towards the end of this summer and hopes to secure planning consent early in 2013.

The project requires capital investment of approximately £160 million by Viridor and the plant will be built by Interserve as the EPC Contractor. Viridor's investment is to be funded from internal funds as required. It is expected to be earnings enhancing in its first full year of operation.

Colin Drummond, Chief Executive of Viridor, said:

"The Glasgow Renewable Energy and Recycling Centre will make a major contribution to Scotland's ambitious Zero Waste Plan. It is a further important step in the roll out of Viridor's service contract pipeline and represents a key part of Viridor's growth strategy in Scotland. The new plants will have a combined gross electrical power generation capacity of 15MWand Viridor will work with its partner, Glasgow City Council, to maximise heat recovery opportunities. The plants are due to come on stream in early 2016. At that time, taking account of existing plants and those under construction plus the Glasgow Centre, Viridor expects to have around 1.8m tonnes of thermal treatment capacity and over 250MW of renewable energy capacity."

Simon Pugsley, Head of Legal at Viridor said:

"Pinsent Masons' project team worked well with Viridor's in-house legal department to land this flagship project. I appreciate their expertise and commerciality in particular and look forward to working with them on future projects."

Anne-Marie Friel, a Senior Associate at Pinsent Masons who advised on the deal, said:

"Generating energy from waste is likely to be an increasingly important part of Scotland's energy mix, so we are delighted to have advised Viridor on this deal which we believe represents an important milestone in Glasgow's progress towards becoming a greener city - and is also a key strategic project for Viridor in Scotland."

The deal is the second such matter to close in recent weeks. In May this year Pinsent Masons advised on what is believed to be Northern Ireland's first landfill gas-fuelled electricity plant in Northern Ireland.

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