Kedco secures finance to finish power plant
Cork-based energy company Kedco expects to be able to proceed with the completion of a multi-million euro gasification project in Newry, Co Down, after being offered a £10m (€11.4m) project finance facility by Ulster Bank.
Completion of the £15m (€17.2m) electricity and heat generating plant stalled earlier this year when Kedco, which is listed on London's Alternative Investment Market, said it had been unable to secure project finance at suitable terms.
It has taken it since February to finally agree a financing deal for the four megawatt plant.
Kedco originally sank £5m (€5.7m) into the development of the plant, most of which had been spent prior to the project being revealed.
A total of £15m was expected to be required, with a joint venture partner intended to provide a 20-year lease on the site.
The project was initially due to be commissioned in 2009, but slipped to 2010, while Kedco had also expected to book a profit from the sale of the plant in the first half of 2010.
In a statement yesterday, the company said that the almost £10m in financing agreed with Ulster Bank includes a term loan as well as VAT, working capital and performance bond facilities.
Kedco is currently working towards satisfying the preconditions for the facility and expects to enter a binding agreement early next year.
Kedco was founded in 2003 by chief executive Donal Buckley, William Kingston and Eddie Barrett.
Farmer Business Developments, a farmers' investment firm whose main interest is a near 26pc stake in insurer FBD Holdings, acquired a 25pc stake in Kedco in 2008.
The Newry gasification plant is expected to deliver earnings before interest, tax, depreciation and amortisation of £2m (€2.3m) per annum from the sale of electricity once it is up and running.
In August, Kedco received planning permission to build a 12 megawatt gasification plant in Enfield, north of London. The estimated capital cost of the facility is £45m (€52m). The company is working on obtaining finance for the scheme and expects construction to take 18 months.
Shares in Kedco jumped over 40pc to almost 6c in London yesterday, valuing the company at almost £16m (€18.3m).