Location ‘dealmaker’ for merchant EfW backing, investor hints
The site location of energy-from-waste (EfW) plants in relation to feedstock is a significant determining factor in attracting investment for merchant projects.
Director of Eternity Capital Alon Laniado told delegates at Sustainability Live this week that potential investors were more likely to support developments that were located close to feedstock because haulage was a significant contributor to a project’s overall costs.
Laniado, who heads up a private equity firm that has focused solely on investment in the waste sector, presented a checklist of a successful merchant model and explained how best to manage risks.
On technology, he said that it was advisable to develop plants that had a proven track record as this reduced risk and was more likely to attract investment. Laniado added that it was also important to employ a workforce that knew how to run a facility effectively.
To ensure that a project was sustainable long-term, he told delegates that the project should be cost-effective in terms of its scale but should also be adapted to the overall strategy. Importantly, it should not rely on high gate fees long-term.
While it was important to take these points on-board, Lanaido also warned developers that they needed to be mindful of the competition.
“We do not expect all of the boxes to be ticked,” he said. “If you spend too much time putting the perfect model together, you may well lose out to other developments that are speedier.”