On Aug. 8, MGT Teesside Ltd. announced it has finalized financing arrangements for the Tees Renewable Energy Plant, a 299 MW combined-heat-and-power (CHP) facility under development in the U.K. A few days later, Enviva Wilmington Holdings LLC, a joint venture of Enviva Holdings LP and affiliates of John Hancock Life Insurance Co., announced its previously announced take-or-pay off-take contract to supply 1 million metric tons of wood pellets per year to the facility is now firm.
The power plant will be located on land within the Teesport Estate near Middlesbrough in northeast England. In July 2015, project developer MGT Power announced that it was partnering with Macquarie Capital and Macquarie Commodities and Financial Markets to deliver the project. According to information released by PD Ports, Macquarie and PKA, a Danish pension fund, will now become the joint owners of MGT Teesside, which will own and manage the Tees REP.
Site preparation work is expected to begin within the next several weeks, followed by main construction a few months later. Commercial operations are currently expected to begin in 2020.
According to a press release issued by PD Ports, the project is expected to cost approximately &pound;650 million ($837.45 million) to construct and will be built under a turn-key engineering, procurement and construction contract by a consortium of Tecnicas Runidas of Spain and Samsung Construction and Trading of South Korea.
&nbsp;&ldquo;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,&rdquo; said Ben Elsworth, CEO of MGT Teesside. &ldquo;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&rsquo;t wait to get work started on site and make this project a huge success for the Teesside region.&rdquo;
Three days after MGT Teesside made its announcement, Enviva announced its off-take contract with the project is now firm, noting all conditions precedent to the effectiveness of the contract have been satisfied. Enviva is expected to begin delivering wood pellets to the power plant in 2019, continuing through to 2034.
Enviva Holdings LP, the sponsor of Enviva Partners, also indicated Enviva Partners has contracted with the Hancock joint venture to supply 375,000 million tons per year of the contracted 1 million ton per year volume to the Tees REP, beginning in 2019 and ramping up to full supply in 2021, continuing through 2034.
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Construction on the Tees Renewable Energy Project is expected to being later this year. 

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On Aug. 8, MGT Teesside Ltd. announced it has finalized financing arrangements for the U.K.-based Tees Renewable Energy Plant. A few days later, Enviva announced its previously announced agreement to supply wood pellets to the plant is now firm. 

Tees REP finalizes project financing, Enviva off-take agreement

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