Challenges in Delivering Infrastructure

Harry WatersAgrivert Limited

16th May, 2013

Agenda

• Introduction to Agrivert

• Our credentials (why we successfully deliver)

• The AD challenge

Agrivert

• Operating for 18 years

• Started in sewage sludge

• Expanded into organic wastes

• Sites in Oxfordshire, Hertfordshire and Northumbria

• Treating food waste for 22 local authorities

• Market leader in Anaerobic Digestion

Agrivert Services

• Design

• Build

• Operate

• Finance

• Food waste treatment

• Green waste treatment

• Biofertiliser recycling

Agrivert’s Experience in Sector

• Anaerobic Digestion

• IVC

• Composting

• Water treatment

Recent Agrivert Projects

• Apr 2013- West London AD plant -50kpa

• Jan 2013 - Wallingford AD plant – 50ktpa

• Jan 2012 - Howden AD plant feed systems

• Sep 2011 - Hendon dewatering plant

• Sep 2010 - Cassington AD plant - 50ktpa

• Jan 2010 - Ardley IVC Facility - 35ktpa

• Apr 2010 - South Mimms IVC Facility - 50ktpa

Cassington AD Plant

Agrivert and AD

• Commissioned Cassington AD plant in Sep 2010 • First year – a good experience

Over 99.5% availability of plant (including commissioning)Power output over last two years over 96.5% (2.1MW)Over 100,000 tonnes of feedstock digestedLocal market demand for digestate fertiliser outstrips volume

produced

• Commissioned Wallingford AD plant in Jan 2013

The Challenge

Despite successful experience in the sector, we struggled to secure finance on our third plant which :-

• Had planning permission granted• Had waste secured on long term contracts• Was based on successful proven technology• Had a successful operating track record• Had a very profitable reference plant• Had a proven construction delivery record

Why?

Bank Experience

• Some banks have lost money abroad because of changing government policy or rapidly changing feedstock markets

• Not all UK experiences have been good, with some plants failing to live up to power expectations (only 55% power output UK ave 2012)

• Sudden changes in other renewables policies (PV) has added risk to plant income

Sector Specific Problems

• Some predicted gate fees are set to nose dive

• No guarantees on gas without guarantees on feedstock composition

• Income is underwritten by biology, which is temperamental

• Contract clauses on Municipal Waste are often not bank friendly

Uncertainty

• Still uncertainty on ROCs, FITs and RHIs

• End of Waste not yet defined

• Will utility companies be allowed to enter market?

• How will dewatered digestate be treated when considering recycling?

• Permitting requirements still evolving

Conclusion

• AD should be an attractive investment opportunity

• Money is in short supply

• Blend of Historic, Sector Specific and Policy Risk make AD unattractive to project finance

• Planning, permitting, technology barriers are dwarfed by financing challenge

Questions

Harry Waters

Commercial Director

hwaters@agrivert.co.uk

Thank You