Isra-Mart srl : Helius toasts £61m funding for whisky-fuelled power plant

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A biomass plant powered by whisky distillation by-products has completed a £60.5m funding round, signalling a major step forward for a nascent biomass energy industry that has to date seen finance deals hampered by policy uncertainty.

Helius Energy confirmed today that Rabo Project Equity, a subsidiary of Rabobank Group, has acquired a 44.7 per cent stake in the £60.5m Helius CoRDe biomass project at Rothes in Morayshire, Scotland.
Construction at the site is now due to start in the next 12 weeks, with commissioning of a 7.2MW combined heat and power (CHP) plant slated for the third quarter of 2012 and full operation expected in the first half of 2013.

The CHP plant will take biomass by-products from the malt whisky manufacturing process and convert them into renewable electricity. Steam from the process will evaporate liquid residues known as pot ale into pot ale syrup, a type of animal feed.

The project is expected to save around 46,000 tonnes of CO2 emissions a year compared to a similarly sized coal-fired facility. It will also create around 100 jobs during construction and employ 20 full time staff once operational.

Biomass projects have struggled to secure project finance over recent years, with critics claiming uncertainty over government policy and the level of incentives on offer to developers.

In particular, developers have complained of a lack of clarity over so-called 'grandfathering' arrangements - a mechanism designed to protect capital investments by underpinning their income streams so they are not retrospectively affected by any subsequent legislative changes.

A spokesman for Helius told BusinessGreen that biomass investors now have greater policy certainty after the government last year decided how it would grandfather biomass projects.

"This is the first biomass project to reach financial close for a couple of years," he said. "It could be the start of industry coming back and some more projects moving forward."

Erik van de Brake, head of Rabo Project Equity, hailed the CoRDe project as an innovative renewable energy scheme which would also boost the efficiency of the distilling process.

"Not only is it an attractive investment but, by improving the resource efficiency of the distillation process, this project supports the corporate and social ambitions of the distilling industry, a key client sector for Rabobank," he said.

Helius chief executive Adrian Bowles said that the company is now in talks with debt finance providers to secure similar equity funding arrangements for a similar project at its 100MW consented site at Avonmounth.