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Sacyr completes financing with CEFC of its first MBT plant in Australia

Spain-headed Sacyr Group, an international industrial and infrastructure construction and services provider has announced that its subsidiaries Sacyr Industrial and Sacyr Environment has completed EUR 24 million (≈ AU$38 million) financing with Clean Energy Finance Corporation (CEFC) to build its first waste treatment project in Australia, a mechanical and biological treatment (MBT) plant for municipal organic waste currently under construction in Dandenong South, Melbourne.

The new South Eastern Organics Processing Facility, a mechanical and biological treatment (MBT) plant for municipal organic waste being built by Sacyr Group in Dandenong South, Melbourne, will process household garden and food waste from council kerbside green waste collections in compost (photo courtesy Sacyr Group).

Food and green waste make up an estimated 42 percent of landfills from Australia’s municipal and commercial and industrial waste. The new South Eastern Organics Processing Facility, which will process household garden and food waste from council kerbside green waste collections, will provide part of the organic waste solution for eight of the 31 councils whose waste streams are coordinated by the Victorian Metropolitan Waste and Resource Recovery Group (MWRRG), a government entity in the State of Victoria.

The contract, awarded to Sacyr Group by MWRRG, includes the financing, engineering, construction, commissioning and operation for 15 years, with a possible extension of five years. The plant will treat the organic waste from dedicated kerbside collection and will have a maximum annual capacity to treat 120 000 tonnes of organic waste to produce 50 000 tonnes of high-quality compost.

Sacyr Industrial and Sacyr Environment have extensive experience in the treatment of urban waste with the building of more than 48 plants and the management of three million tonnes of waste annually. Sacyr is already present in Australia through its subsidiary Sacyr Water, which has built and operates the Binningup desalination plant (Perth). In addition, Sacyr Industrial is building a tertiary water treatment plant for agricultural use north of Adelaide.

MBT-plant to produce quality compost

According to Sacyr, the selected process technology – mechanical and biological treatment (MBT) – is among the most advanced in the recovery of waste. The biological treatment of tunnel composting is based on technology from the Dutch company Waste Treatment Technologies (WTT), which the environment and waste management team of Sacyr has integrated with both European and Australian equipment and components.

The compost obtained has a significant commercial value due to the aerobic tunnel fermentation process and the aerobic maturation in the warehouse, resulting in a product that complies with the most demanding standards within the industry and with the rigorous Australian quality standard AS4454.

Sacyr expects its fully-enclosed, in-vessel aerobic composting and maturation plant to be operational in mid-2019. The technology, developed over two decades, ensures plant storage reservoirs are completely sealed and uses efficient and reliable deodorisation systems.

CEFC investment

The project meets the objectives of the Australian waste management plan to reduce the amount of landfill waste and reduce the emission of greenhouse gasses (GHG) such as methane and landfill gas (LFG). According to the Clean Energy Finance Corporation (CEFC) that is committing up to AU$38 million to the AU$65 million plant, the project demonstrates how CEFC finance can address methane emissions, which have a global warming potential 25 times stronger than that of carbon dioxide (CO2).

We look right across the economy to identify finance opportunities to reduce Australia’s emissions, and we’re pleased to be making our first project investment to help councils and communities tackle emissions from their organic waste. When organic waste such as food and green waste ends up in a landfill it breaks down and produces methane. With this technology, councils can avoid those emissions by turning their organic waste into re-usable compost, while also reducing our unsustainable reliance on landfill as a waste disposal option. We strongly endorse the principle of avoiding and reducing waste at the source. Our finance is about effectively managing the remaining waste, so that it doesn’t end up as landfill and we make a meaningful difference to our greenhouse gas emissions, said Ian Learmonth, CEO, CEFC.

Participating councils are charged gate fees to use the facility, with the majority of the compost produced sold back to the councils for use in community parks and gardens. The eight councils are Bayside, Cardinia, Casey, Frankston, Glen Eira, Greater Dandenong, Kingston and Monash.

On August 2, the Minister for the Environment and Energy, the Honourable Josh Frydenberg; Rob Millard, CEO of MWRRG; Ian Learmonth, CEO of CEFC amongst other political and business dignitaries visited the South Eastern Organics Processing Facility that is currently under construction (photo courtesy Sacyr Group).

CEFC Bioenergy Sector lead Henry Anning said the CEFC finance model for the Melbourne project was an industry first, providing councils with access to a project financing structure that has rarely been leveraged across local government. The innovative approach means the large-scale investment can proceed on the basis of revenues from gate fees.

Australia’s waste sector is facing enormous challenges, because of the growing amount of waste we produce as well as increasing community concerns about the way we handle that waste. This new Melbourne facility provides us with a practical and proven way to turn organic waste into a reusable commodity at the same time as avoiding harmful emissions. It is aligned with the principles of the internationally-accepted waste hierarchy, which encourages reduction, reusing, recycling, reprocessing and energy recovery as effective waste management options. We need to think of waste differently, so that instead of becoming a problem it becomes a resource, whether for compost, recycling, bioenergy or biomass. We expect to see more councils and communities consider innovative ways to manage all forms of waste. This innovative project finance model offers opportunities for other groups of councils considering investing in substantial waste management infrastructure to reduce landfill waste, said Anning.

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