US renewable energy company Intrinergy and European waste management specialist Shanks Group Plc are to build a biomass plant in Belgium after winning the support of a German bank.

US renewable energy company Intrinergy and European waste management specialist Shanks Group Plc are to build a biomass plant in Belgium after winning the support of a German bank.

The companies secured €34 million (£28.9 million) of senior debt from Nord, which will cover 80 per cent of the cost of building VARE, a combined heat and power plant with a wood pellet manufacturing operation. Intrinergy and Shanks will provide the outstanding 20 per cent of the budget.

VARE is to be fuelled by renewable biomass supplied by Shanks subsidiary Foronex, and will generate up to 12 MW of steam and almost 5 MW of electrical power. This will be used to produce 50,000 tons of pellets per year, a fuel source used instead of heating oil and natural gas.

Intrinergy chief executive John Keppler said the deal shows the company’s ability to create energy and environment investment opportunities. “At a time when the credit markets are tightening, we’re delighted to be able to close on this transaction and extend Intrinergy’s renewable energy franchise.”

Shanks chief executive Tom Drury added: “Combining Shanks’ biomass resource skills with Intrinergy’s combined heat and power experience and wood pellet manufacturing and distribution expertise creates a robust business model that can potentially be used on future projects.”

VARE’s project counsel is Hunton & Williams, which is led by John Deacon in London and Hervé Cogels in Brussels. Deacon said Intrinergy is an existing client of the firm’s US office. “This project will be Intrinergy’s first in Belgium although they have been active in Germany for some time.”

Intrinergy and Shanks were supported during the technical review of the proposed biomass plant by consultancy firm Currie & Brown.

Its team was headed by director Jim Crossman, who explained that the firm was approached to work on the deal due to its previous wind turbine and energy-from-waste work with Shanks, Hunton & Williams and Nord.

“The strength of the relationships and interdependencies are believed to have benefited Intrinergy and Nord in this transaction,” Crossman said.

Meanwhile, Shanks was represented on the legal issues of the funding by Eline Meesseman at Simmons & Simmons in Brussels.

Meesseman said the group is a long-standing client of the firm. “We were once again happy to work closely with the local management and Foronex to combine the strengths of Shanks and Intrinergy to increase their long-term growth prospects in the renewable energy market.”

An engineering due diligence review was provided at Nord’s request by global professinal services firm Sinclair Knight Merz (SKM).

The firm also supplied technical and contract advice to the debt provider as well as on the power and heat sales and implementation arrangements.

SKM’s team, led by David Brimelow, a technical manager in its European power and industry team, also advised on the selection of a suitable contractor to build the plant.

“The choice of technology for a project of this type can change significantly during its development,” Brimelow said. “In this case, two types of gasifier were considered by the client and reviewed by SKM before deciding on the more conventional grate combustion solution,” he added.