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South Tyne & Wear Waste Partnership PFI

Financial Advisory

14th December 2020

DWPF provided financial advice to the three partner councils forming the South Tyne & Wear Waste Management Partnership (The Borough Council of Gateshead, The Borough Council of South Tyneside, and The City of Sunderland) on the refinancing of the STWWMP PFI project.

 

The STWWMP PFI is a concession contract between STWWMP and the Contractor, a special purpose vehicle owned by Suez, Itochu and the Civis PFI/PPP Infrastructure Fund LP, to manage 190,000 tonnes of residual household waste each year, including the design, build, finance and operation of an Energy Recovery Facility in Teesside with a capacity of up to 256,000 tonnes per year, and the development of three waste transfer stations, and a visitor centre.

 

The refinancing replaced the funded Debt Service Reserve Account with a contingent Debt Service Facility, while leaving the rest of the financing structure in place, thus releasing funds for the benefit of the shareholders. STWWMP was entitled to a contractually defined share, which it chose to take as a discount against future Unitary Charge payments for the remainder of the concession.

 

DWPF ensured that STWWMP’s interests were protected throughout the refinancing process. The mandate encapsulated modelling, process management, negotiation of documentation, approvals, and liaison with both the consortium and its advisers and the Department for Environment, Food and Rural Affairs. STWWMP relied on DWPF to assess the value for money of the refinancing proposal.

 

Simon Johnson, Project Lead and Director at DWPF, says: “I am delighted that this transaction has successfully reached financial close, providing STWWMP with a significant reduction in the price for future waste tonnage. As always, DWPF worked hard to ensure that the outcome was optimised for our client. On a personal note, I have been involved with the STWWMP PFI since the bid stage, financial close in 2011, and a subsequent equity sale, so to participate in another significant milestone in the project lifecycle is immensely satisfying.”