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Auction for ?1.5bn rubbish-fueled power plant kicks off

Chinese investment funds are crowding into an auction for a rubbish-fuelled power plant on the banks of the River Thames that could fetch its owners over ?1.5bn.
A major US debt fund, advised by JP Morgan and Credit Suisse, kicked off an auction for the Cory Riverside ­energy-from-waste plant last month, which is understood to have caught the eye of Chinese investors eager to snap up British infrastructure. Hong Kong billionaire Li Ka-shing is expected to show strong interest. His company ­already holds a string of energy and water assets including Northern Power Networks and Northumbrian Water.
Chinese state-backed funds China Everbright Group and Beijing Enterprises are also understood to be ­circling.
UK-focused funds Dalmore Capital, Amber Infrastructure, Equitix and ­Arcus have also been linked to the deal, which could top ?1.5bn after a major financial overhaul. The Cory plant is the largest of its kind in the UK and generates power by burning around 750,000 tons of non-recyclable waste every year.
Auction for ?1.5bn rubbish-fueled power plant kicks off

The plant generates power by burning around 750,000 tonnes of non-recyclable waste every year
Under long-term contracts with ­local London councils, enormous barges of municipal waste use the ­waterway to ferry the rubbish to the plant, which is on the south side of the river near Thamesmead.
Strategic Value Partners acquired the plant as part of a debt-for-equity deal worth around ?850m before gutting its operations and putting in place a new management team led by chairman Jonson Cox, who also chairs the water regulator. Cory Riverside generated pre-tax earnings of ?76m last year, but bidders believe that this could rise to ?95m following the overhaul, and reach ?199m by 2027.
Historically, waste incinerators in the UK have had a poor reputation, but the industry has been cleaned up.
In 2016, almost 10m tons of non­-recyclable waste was used to generate power at 37 energy-from-waste plants in the UK.
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