Dalkia and Fengate Capital close financing for biomass plant in British Columbia

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Dalkia and Fengate Capital close financing for biomass plant in British Columbia

Dalkia and Fengate Capital Management Ltd. will develop one of Canada's largest biomass plants which will be designed, built and operated by Dalkia in Fort St. James, British Columbia.

Fort St. James Green Energy LP, a partnership between Dalkia Canada Inc., a subsidiary of Veolia Environnement and Électricité de France, and Fengate Capital Management Ltd. said Thursday that it had closed a C$175-million debt financing to support construction of the 40-megawatt, C$235-million biomass power plant.

Funding for this project will be provided by a pool of banks: Bank of Tokyo-Mitsubishi UFJ, CIBC, National Bank of Canada, Natixis and Rabobank.

Under this DFBOM (Design, Finance, Build, Operate and Maintain) contract, Dalkia and Fengate Capital Management Ltd. have contracted Iberdrola Engineering & Construction to build the plantDalkia will operate and maintain the facilities and manage the wood biomass supply and preparation.

With an electricity capacity of 40 MW, this new plant will consume 307,000 metric tons of biomass a year. Dalkia will manage the biomass supply working closely with local forestry companies, sawmills and the First Nations. The biomass used by this plant will largely comprise waste from the British Columbia forestry industry, such as sawmill and logging waste, and trees killed by the mountain pine beetle epidemic that has ravaged British Columbia forests over past ten years.

This plant will generate electricity sold to BC Hydro & Power Authority to power almost 40,000 Canadian households. It will avoid the annual discharge of around 95,000 metric tons of CO2 - the equivalent of more than 45,000 cars off the road.

The project will also create around 250 jobs during the construction phase, and then 80 new direct and indirect jobs during the 30-year operation period.

Franck Lacroix, Chairman of Dalkia, said:

"This project will capitalize on Dalkia's worldwide experience in designing and operating more than 450 biomass plants. In winning this contract, Dalkia has demonstrated its know-how and expertise, and the relevance of its international growth strategy. Dalkia and Fengate Capital Management Ltd. are together finalizing an identical biomass power plant in Merritt, British Columbia."

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