Stobart Biomass Framework Agreement

RNS Number : 4729N

Stobart Group Limited

09 September 2013

 

9 September 2013

STOBART GROUP LIMITED

('Stobart' or 'the Group')

Stobart Biomass Framework Agreement

The Board of Stobart is pleased to announce that Stobart Biomass Products Limited ("Stobart Biomass") has entered into an exclusive Master Framework Agreement with Greensphere Capital LLP ("Greensphere") for the supply of up to 1,000,000 tonnes of biomass fuel per annum into existing and future biomass power plants.

Stobart has worked closely with Greensphere over the past 18 months in the renewable sector and together they have identified a number of existing and potential biomass projects for possible investment by funds managed by Greensphere.

Greensphere Capital will be investing in a national platform of waste biomass power plants, to which this Framework Agreement will provide fuel. Greensphere Capital manages capital on behalf of institutional investors, including the UK Green Investment Bank ("GIB"). In 2012, Greensphere was awarded a fund management mandate by the GIB for waste and waste-to-energy investments.

The Master Framework Agreement specifies the terms that individual supply contracts with specific plants will adopt and although at present there is no minimum volume commitment the expectation is that volumes will grow over the coming three years, as plants are acquired and developed.  In addition to the income generated by Stobart Biomass for the supply of the fuel the Group will generate revenues from transporting the product and from supporting each new project through to commissioning.

A key element in the success of biomass projects is the provision of a long-term, reliable, sustainable fuel supply.  Stobart Biomass is able to meet these demanding requirements and this capability was recognised by Greensphere early on when they decided to invest into this renewable market.

Andrew Tinkler, Chief Executive Officer, said "We believe Greensphere is the ideal partner for Stobart Biomass in this rapidly expanding market and whilst we continue to work with a number of other plant developers this agreement promises to underpin a sizeable element of our biomass supply strategy."

ENDS

About Stobart Biomass

Launched in early 2010, Stobart Biomass is a leading processor, supplier and transporter of biomass fuels, forming a supply partnership with customers that plays a valuable role in meeting the UK's biomass targets.  Biomass is the valuable fuel that is powering the rapidly-emerging minimum carbon heat and power generation sector.

Stobart Biomass employs around 300 personnel and is now at the forefront of the fast-developing UK market. In addition to the wood and life-expired timber traditionally used for biomass, the Company has been quick to identify and develop the potential of Refuse Derived Fuels, exporting large volumes to energy plants across northern Europe and Scandinavia.

Today Stobart Biomass is processing material at a national network of strategically located sites close to both the feed stocks and the end users, minimising unnecessary transport and cutting carbon emissions. These sites also offer valuable stockpiling capacity, providing ample material to meet peak winter demands.

Transportation is an important factor in the supply of all forms of solid fuel.  Around 40% of the cost of biomass fuels is attributable to logistics and cost-effective, environmentally responsible delivery to market is essential. Drawing on the industry-leading logistics capability of Eddie Stobart and its dedicated environmental transport fleet, Stobart Biomass is capable of matching the smallest up to the largest fuel contracts with unrivalled logistics capability and benchmark standards of efficiency.

About Stobart Group

With over 5,900 employees operating from more than 50 sites across the UK and Europe, Stobart is a UK front-runner in the multimodal logistics, warehousing, civil engineering, rail infrastructure and biomass fuel sectors. At the core of the Group is the Transport and Distribution division, incorporating Eddie Stobart - the iconic name behind a huge road haulage fleet totalling some 2,400 vehicles, over 3,000 trailers and over seven million square feet of warehousing. Stobart Estates, Stobart Infrastructure and Civils, Stobart Air and Stobart Biomass divisions complete the Group's business structure.

www.stobartgroup.co.uk 

About Greensphere Capital

Greensphere Capital LLP ("Greensphere") is an FCA authorized and regulated specialist investment firm focused on sustainable energy and infrastructure.  It was established in February 2011 by its three founding members:  Divya Seshamani, Vince Julier and Jon Moulton (as non-executive Chairman), in order to bring discipline and rigour to sustainability and clean energy investing.

Greensphere invests in assets, on behalf of its investors, to create portfolios of long-term cash-yielding investments, underpinned by material and defensive sub-sector platforms.  The first sub-sector platforms are concentrated on UK waste and waste-to-energy, namely Anaerobic Digestion and Waste Wood Biomass. Greensphere closed its first major investment platform, in Anaerobic Digestion, in November 2012.

Greensphere was the first fund manager to be awarded a fund management mandate from the UK Green Investment Bank (GIB) for waste and waste-to-energy investments, after an extensive process involving 23 fund managers.  The GIB is now one of several investors in funds managed by Greensphere.

Enquiries:

Stobart Group	[phone]
Andrew Tinkler, Chief Executive Officer
Ben Whawell, Chief Financial Officer
i-nfluence Associates	[phone]
Stuart Dyble/James Andrew
Lansons Communications	[phone]
Tony Langham [e-mail]	[phone]
Anna Schirmer	[phone]

 

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