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The 49.9MW combined heat and power (CHP) facility at Fife is due to be commissioned later this year and be fully operational by mid 2013.
Under the deal, SITA will provide more than half of the feedstock requirements to the site which is currently under construction.
The contractor says it will use its existing network of sites across Scotland and the north of England to recover and process the wood.
It is likely that the deal will see up to £10n invested by the company and around 100 new jobs created.
Maxine Perella
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