Successful syndication for UK waste PFI

In a positive sign for the syndication market, three banks – BBVA, Credit Agricole and Natixis – have closed an oversubscribed syndication of £236m of senior secured credit facilities for the SITA South Tyne & Wear waste project.

The three banks acting as bookrunners and mandated lead arrangers to the UK’s SITA South Tyne & Wear waste Private Finance Initiative (PFI) project have announced the oversubscribed syndication of £236 million (€272 million; $385 million) of senior secured credit facilities in support of the deal.

The SITA transaction reached financial close in April this year, with general syndication launched the following month by Banco Bilbao Vizcaya Argentaria (BBVA), Credit Agricole Corporate & Investment Bank (CA-CIB) and Natixis. The syndication has now closed oversubscribed, with KfW IPEX-Bank (London), Mizuho Corporate Bank and Sumitomo Mitsui Banking Corporation Europe joining the transaction.

The facilities will be used to finance the design, construction and operations of an energy-from-waste plant located in the north-east of England, together with three associated waste transfer stations. The plant will be able to process 256,000 tonnes of waste per annum and generate around 18 megawatts of net power output.

The project has been procured by the South Tyne and Wear Waste Management Partnership, which comprises three local authorities – Gateshead Council, South Tyneside Council and Sunderland City Council.

Australian developer Lend Lease, UK recycling and resource management company SITA UK and Japanese trading house Itochu will design, build, finance and operate the waste facilities, which will be governed by a 25-year PFI/PPP concession agreement.

Under the agreement, the local authorities will exclusively deliver waste to the waste transfer stations. The waste will then be transported for processing at the energy-to-waste plant, which is located between 26 and 35 miles away from the stations.