Securing financial support for an AD project can be challenging. Private finance is available but owing to the significant capital expenditure associated with bioenergy facilities and the risks involved, such funding can be difficult to obtain. To bridge this gap the Government is providing targeted financial support to the bioenergy sector. A comprehensive list of the financial schemes available for anaerobic digestion has been published by ADBA and is available here. A helpful glossary of investment terms can also be found here.
Some specific schemes of relevance are described below.
Anaerobic Digestion Loan Fund (ADLF)
The ADLF is a £10 million fund designed to support the development of new AD capacity in England. The fund can provide asset backed loans for plant, machinery and/or groundworks. The loan is for between £50,000 and £1,000,000, requests above this figure will be considered only at the discretion of the Investment Committee. The maximum term of the loan is five years, though early repayment or shorter terms are regarded favourably. More details can be found on the WRAP website.
On Farm Anaerobic Digestion Loan Fund
The On Farm AD loan fund is a £3 million initiative designed to support farm-scale AD capacity in England. The fund will be available to farms planning to build an AD plant with a capacity of up to 250 KWe and which have access to slurries or manures to use as feedstock. The fund is split into two parts. Farmers will first be able to apply for a business plant grant of up to £10,000 to investigate the environmental and economic potential of building an AD plant on the farm. The second part is a capital loan up to £400,000, or a maximum of 50% of the project cost. More details can be found on the WRAP website.
Green Investment Bank (GIB)
The Green Investment Bank was set up by the UK Government as a public company in October 2012. The Bank has £3 billion to invest in sustainable projects, where public capital is used to support private investment. Energy from Waste, which includes anaerobic digestion, is a specific priority area for the bank. To discuss investment opportunities contact the GIB waste and bioenergy team.
Enterprise Finance Guarantee (EFG)
The Enterprise Finance Guarantee (EFG) is a targeted measure intended to facilitate additional commercial lending to viable SMEs unable to obtain a normal commercial loan due to having no or insufficient security. Further information is available from the British Business Bank.
Rural Community Renewable Energy Fund
The Rural Community Energy Fund (RCEF) is a £15 million programme, jointly funded by Defra and DECC. It supports rural communities in England to develop renewable energy projects which provide economic and social benefits to the community.
The fund provides up to approximately £150,000 of funding for feasibility and pre-planning development work to help projects become investment ready. RCEF provides support in two stages:
- Stage 1 provides a grant of up to approximately £20,000 to pay for an initial investigation into the feasibility of a renewable energy project;
- Stage 2 provides an unsecured loan of up to approximately £130,000 to support planning applications and develop a robust business case to attract further investment.
For more detail visit the RCEF pages on the WRAP website.
Community and Renewable Energy Scheme (CARES)
The newest strand of CARES, the Local Energy Challenge Fund is currently closed. Details of funded projects are available on the Local Energy Scotland website. This scheme aims to provide loans towards the high risk, pre-planning consent stages of renewable energy projects (including AD) in Scotland which have significant community engagement and benefit.
Enhanced Capital Allowance
The Enhanced Capital Allowance (ECA) scheme provides businesses with enhanced tax relief for investments in equipment that meets published energy-saving criteria. With CHP, case by case Certification is needed to ensure support is provided for ‘good quality’ CHP. Certification is achieved using the CHP Quality Assurance programme (CHPQA).
Scottish Recycling Fund
The Scottish Recycling Fund (SRF) is a £3.8M fund established by Zero Waste Scotland and Scottish Enterprise to develop or expand materials reprocessing capacity and remanufacturing facilities in Scotland. Waste materials eligible for the fund include industrial food and drink processing waste.