MVV secures significant funding for its new UK thermal waste treatment plant in Medworth, backed by KfW IPEX-Bank and SERV. Discover how this landmark project is set to transform Waste-to-Energy in the UK.
Key Takeaways
- MVV secures significant funding for its new thermal waste treatment plant in Medworth, UK, marking a historic investment of approximately half a billion euros.
- The project, constructed by Kanadevia Inova, represents MVV’s fourth facility in the UK, complementing existing plants in Plymouth, Ridham Dock, and Dundee.
- KfW Ipex-bank provides the financing, combining construction and operating phase funding, all hedged against risks through derivative instruments.
- For the first time, Serv integrates Swiss export risk insurance into MVV’s financing, significantly enhancing the project’s financial structure.
- MVV’s collaboration with KfW Ipex-bank and Serv ensures a tailored financing solution, highlighting the importance of efficient cooperation among project participants.
MVV is expanding its portfolio of thermal waste treatment facilities in the United Kingdom. Construction has commenced at the medworth site in Wisbech, Cambridgeshire, marking the company’s fourth facility in the UK. This follows existing plants in Plymouth, Ridham Dock, and Dundee. The medworth project represents the largest single investment in the company’s history, with an investment volume of approximately half a billion euros. The Swiss green-tech company Kanadevia Inova is responsible for the plant’s construction.
Financing Structure and Partners
MVV is funding this investment with a substantial amount of its own capital, supplemented by external debt financing secured prior to construction. This financing, structured with KfW Ipex-bank, is a dedicated, unsecured corporate financing facility in the mid-three-digit million British Pounds range. The debt financing is divided into a construction period financing and an operating phase financing, with a total term of 19 years.
The construction period financing is designed as a flexible multi-currency facility, available in euros, Swiss francs, and British pounds. The operating phase financing is denominated entirely in British pounds. Interest rate and currency risks are hedged through derivative instruments. kfw ipex-bank provides all financing and hedging instruments, acting as sole lender, sole hedge provider, and sole eca agent.
Dr. Velibor Marjanovic, a member of the management board of KfW Ipex-bank, stated that the bank is pleased to support mvv in this modern and significant infrastructure project, contributing its expertise to offer tailored financing solutions.
Role of Serv in the Financing
For the first time, the German energy supplier has integrated the Swiss export risk insurance (Serv) into its financing arrangements. Based on the construction contract between MVV and Kanadevia Inova, Serv is involved in the project’s financing. Serv covers the majority of the financing share attributable to the construction contract through a buyer credit insurance policy with KfW Ipex-bank. This integration was initially coordinated between Serv, Kanadevia Inova, and MVV, then implemented with KfW Ipex-bank into a tailored financing solution through an efficient process.
Klaus Schmidberger, senior vice president, project finance & infrastructure, stated that Serv, as a strong risk partner, makes a central contribution to the successful structuring of this long-term export financing. He highlighted Serv’s support for Swiss cleantech companies in international business, particularly in large-scale projects with high financing volumes and long terms, citing the medworth project as an example of Serv’s value for Swiss exporters, their clients, and financing partners. He also noted the constructive cooperation among all project participants contributed significantly to the swift conclusion of the transaction.
Marc Speicher, head of finance at MVV Energie AG, commented on the successful implementation of a large-volume and long-term corporate financing with an integrated interest rate and currency hedging structure, precisely tailored to the investment, in collaboration with KfW Ipex-bank and Serv. He added that the initial integration of buyer credit insurance into a financing allowed the company to gain valuable experience and further expand its portfolio of usable financing instruments.
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