Drax Group Plc (DRX) received 100 million pounds or $163 million from Britain’s Green Investment Bank (GIB) to fund its $1 billion plan to convert the nation’s biggest coal- fired power plant to burn wood pellets, according to Bloomberg.
GIB is providing the amortizing term loan along with Prudential Plc and the M&G U.K. Companies Financing Fund, which pledged the same amount of funding in July. Group of banks has supplied Drax with 400 million-pounds in revolving credit set to mature in April 2016.
In total, Drax has raised 790 million pounds that will cover the cost of converting half its units into biomass burning equipment within 36-48 months. By June 2013, six of its units should be burning wood pellets.
Britain’s biomass industry has gained momentum and alleviated investor concerns since U.K. lawmakers have clarified its support levels.
The Department of Energy and Climate Change estimates bioenergy plants may meet 8 percent to 11 percent of the nation’s primary energy demand by 2020.
To read the original Bloomberg article, click here