Jobs on way after £750m deal to transform waste into energy

SIXTY permanent jobs are expected to be created in Yorkshire through a scheme which creates energy from household waste.

Waste firm Shanks and Wakefield Council have agreed a 25-year private finance initiative (PFI) deal, worth £750m, to build a recycling and anaerobic digestion plant in West Yorkshire.

The project has been backed by a £30.4m investment from the Green Investment Bank (GIB), which opened in November with £3bn of funding from the Government.

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The bank has been set up as a public company to make a profit.

It aims to develop the green economy and attract private sector capital for projects that protect the environment, including offshore wind schemes and initiatives that turn waste into energy.

Barclays, German bank BayernLB and the Japanese bank Sumitomo Mitsui Banking Corporation are also providing funding for the Wakefield Council project.

Shanks said the plans for the plant in South Kirkby, near Pontefract, which will power about 3,000 homes, are set to create about 250 jobs during construction work.

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GIB chairman Lord Smith of Kelvin said yesterday: “Each year the UK generates approximately 190 million tonnes of waste, which causes environmental damage and costs businesses and consumers money.

“The UK Green Investment Bank is committed to reducing the amount of waste which goes to landfill, supporting the UK in its transition to a low carbon economy, while driving a commercial return for the bank.”

Shanks said the facility will process up to 230,000 tonnes of waste each year and will help the council divert 90 per cent of waste away from landfill.

Under the contract, Milton Keynes-based Shanks will also take over a network of household waste recycling centres.

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The group, which reported an annual turnover of £750m last May and employs more than 4,000 people, said it would also build a visitor centre to promote waste education.

The GIB has already committed about £8m to a similar scheme in Teesside, which was announced in November, when the GIB was officially launched.

Peter Box the leader of Wakefield Council, said the deal would provide an economic boost for the district. He added: “It is excellent news for the district, bringing jobs and investment, as well as improving a service which is always high on the public’s agenda.

“It gives us the opportunity to safeguard jobs of current employees who work in this area and provide new jobs in one of the most deprived areas in the district with the building and opening of the new waste treatment plant in South Kirkby.

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“We are looking forward to working with Shanks and to making a real difference to waste management in this district.”

Joanne Roney, chief executive of Wakefield Council, said: “This is a big step forward in how a key public service is delivered in the district.

“The agreement means investment in household waste collection and recycling and more jobs for the district.

“It has been a long journey and at times challenging, but throughout the negotiations we have never lost sight of the need for additional finance to deliver a waste management system for the future.

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“I am very pleased that this 25-year contract has now been signed and we can move on to concentrate on the job of improving waste and recycling services for everyone in the district and protecting the environment.”

Leeds-based lawyers from Walker Morris acted as legal advisers to Wakefield Council.

David Kilduff, the head of commercial at Walker Morris, who led the team supporting Wakefield, said yesterday: “The successful conclusion of this PFI is welcome news for the council, the local economy, residents and the environment.”

In a note published yesterday, analysts at Peel Hunt said it was Shanks’s first PFI win for some time, and the level of anticipated returns should help to validate the investment programme.