This paves the way for the completion of the plant in North East England which will produce renewable transport fuel and provide 750 jobs for two years with 70 permanent jobs once the plant is fully operational. The un-named lender has agreed to provide £25 million debt finance while also working towards securing the outstanding debt from elsewhere in Europe.

It is envisaged that raising the senior debt will be completed within the next few weeks. The project is one of only a few large industrial UK projects to have secured risk bearing project debt in the last three years.

The plant itself will be operated by Vireol and will produce ethanol, Renewable Transport Fuel (RTF) and various other products such as high protein animal feed, distillers dried grains and solids (DDGS) and carbon dioxide. Agreements worth over £1.5 billion are currently being finalised for the purchase of these products which when completed will ensure the plant’s long term profitability.

An EU directive requires that 13% (around 23 billion litres) of European petrol fuel must derive from renewable sources by 2020. At present the figure stands at just 3.5% and that means the renewable transport fuel sector is likely to grow eight fold by 2020.

FCP is aiming to raise the final £85 million of financing from sophisticated and high net worth investors who will benefit from high returns and downside protection. FCP expects to provide returns in excess of 30% per annum over a five to seven year period. Capital allowances will enable investors to protect up to 100% of their investment.

Securing debt financing has been key to the project’s viability according to Tim Levy at FCP.