waste-to-energy, renewable energy, power, energy, Dublin, Ireland, Covanta Covanta to begin construction on new waste-to-energy facility - PennEnergy

Covanta to begin construction on new waste-to-energy facility

Source:Covanta

Covanta to build, own and operate a new 58 net megawatt Energy-from-Waste facility in Dublin, Ireland.

Covanta Holding Corporation (NYSE: CVA) has executed an agreement with the Dublin City Council to build, own and operate a new 600,000 metric ton per year, 58 net megawatt Energy-from-Waste facility in Dublin, Ireland. 

Covanta also announced that it has achieved financial close on a comprehensive project financing package and plans to commence construction of the Dublin Waste-to-Energy Facility project immediately.  Construction is expected to take approximately three years, with commencement of operations targeted for late 2017.

The Dublin Waste-to-Energy Facility will provide the Dublin region with a long-term sustainable and environmentally superior waste management solution, enabling it to divert post-recycled waste from landfills and become locally self-sufficient in managing waste, consistent with regional, national and EU waste policies.  When complete, the facility will generate clean renewable energy to supply 80,000 homes and designed with technology and infrastructure to provide enough heat to meet the equivalent needs of over 50,000 homes if a district heating system is implemented in the future.

"The facility will be state-of-the-art in all respects, including energy efficiency and environmental performance, and will provide a meaningful boost for the local economy," said Covanta CEO and President Anthony J. Orlando

The total investment in the construction of the facility will be approximately €500 million (US$642 million), funded by a combination of third party non-recourse project financing (€375 million/US$481 million) and project equity invested by Covanta (approximately €125 million/US$160 million).  The third party project funding includes €300 million (US$385 million) of project debt, representing approximately 60 percent leverage, and a €75 million (US$96 million) convertible preferred investment by the energy infrastructure arm of First Reserve, one of the world's leading private equity and infrastructure investment firms in the energy sector.

Macquarie Capital has served as exclusive financial advisor to Covanta in connection with structuring and raising capital for the project.

The project agreement executed with Dublin will cover 45 years of facility operations, after which facility ownership will revert to Dublin.  Covanta will be responsible for sourcing waste supply for the facility, which will consist of residential, commercial and industrial waste streams from Dublin and surrounding areas.  During the first 15 years of operations, Dublin will share in any upside or downside in facility waste revenue relative to a baseline projection.  Dublin will also share in energy revenue generated by the project for the full 45 year term of the contract.

Over 50 percent of the facility's renewable electricity generation is expected to qualify for preferential, inflation-escalated pricing under Ireland's renewable feed-in tariff through 2031, with the remainder of electricity sold at market rates.  If a district heating system is developed by Dublin, then the facility will also sell energy in the form of steam heat and receive an enhanced renewable incentive for a portion of the electricity sold.

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