Tees Renewable Energy Plant Concludes Financing Arrangements

11 August, 2016:

MGT Teesside Limited today announces the conclusion of financing arrangements for the Tees Renewable Energy Plant (Tees REP or “the project”), a 299 MWe biomass fuelled combined heat and power project located on land within the Teesport Estate near Middlesbrough in North East England.

Project developer MGT Power announced in July 2015 that it was partnering with Macquarie Capital and Macquarie Commodities and Financial Markets (together ‘Macquarie’) to deliver the project. Macquarie, together with Danish pension fund PKA, will now become the joint owners of MGT Teesside, which will own and manage the Tees REP.

The project will cost approximately £650m to construct and will be built under a turn-key ‘engineering, procurement and construction’ contract by a consortium of Tecnicas Reunidas of Spain and Samsung Construction and Trading (SCT) of South Korea. The contractor is working to include local capabilities in the project and SCT owns Darlington-based Whessoe Engineering who will continue to support the project from a local perspective.

Site preparation works will begin within weeks, with main construction works starting a few months later. Commercial operations are due to start in 2020.

At least 600 jobs will be created during construction and about 100 full time jobs sustained on site once operational plus several hundred more in the supply chain – many in the local region. Biomass discharge services will be provided by PD Ports through the port of Teesport. Teesside-based energy and process industry specialist, the px group, has been engaged to support MGT Teesside during the construction phase alongside Poyry Energy, RPS and Mace.

Ben Elsworth, CEO of MGT Teesside, said: ‘The Tees REP project has had to overcome many hurdles in development but we have now successfully reached the next stage despite the difficult financing environment. Support from the local region and a big team effort from Macquarie and all of the different parties involved in the project were instrumental in getting there. We can’t wait to get work started on site and make this project a huge success for the Teesside region’.

Mark Dooley, Head of Infrastructure, Utilities and Renewables, Macquarie Capital Europe commented: We are delighted that our partnership with MGT Power will enable the delivery of this important project for the economy of North-East England. Macquarie is committed to supporting UK’s move to green energy and we see Tees REP as a key component of this transition.’

David Robinson, CEO of PD Ports, said: ‘This is excellent news for Teesside and gives substantial impetus to the long-term economic activity in the area as well as positioning the region as a major energy hub, creating hundreds of jobs and many more in the wider supply chain. Attracting such a significant UK energy infrastructure project to Teesport further complements recent investments made by PD Ports including the decision to redevelop our Number One Quay last year’

Cllr Dale Quigley, cabinet member for economic growth at Redcar & Cleveland Borough Council, said: ‘This is a massive investment into Redcar and Cleveland, and we really welcome this news which will bring high quality jobs to people in our borough. We are proud to have supported MGT Power to help bring this project to fruition and look forward to continuing our work to help them grow and create more employment opportunities for local people.’

Ian Clifford, Chief Executive Officer of px group said: ‘We are delighted to have been selected to operate this site and very much look forward to working with MGT. The fact that the plant is on our doorstep and increases our involvement in the renewable energy sector makes it doubly satisfying. This is the second major contract we have won in 2016 and supports our expansion and diversification programme, securing and creating jobs in the energy sector.’

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