Waste-to-en­ergy firm Co­vanta lost €48m as Dublin plant started up

Irish Independent - Business Week - - FRONT PAGE - John Mul­li­gan

THE con­tro­ver­sial waste-to-en­ergy fa­cil­ity at Dublin Port racked up a €48.8m loss in 2017 as the plant came on stream, ac­counts just filed for the busi­ness show.

The €500m plant is owned by US firm Co­vanta and a unit of Aus­tralia’s Mac­quarie in­vest­ment bank, and was de­vel­oped as a pub­lic-pri­vate part­ner­ship with Dublin City Coun­cil, which acts on be­half of the four Dublin lo­cal author­i­ties.

The ac­counts show that the fa­cil­ity gen­er­ated turnover of just un­der €40m in 2017 and ex­ported 151MW of elec­tric­ity to the grid.

The plant pro­cessed 278,700 tonnes of waste last year and made an oper­at­ing profit of €11.3m.

The waste-to-en­ergy plant was de­signed to han­dle 600,000 tonnes of waste a year from the Dublin re­gion. That waste is ma­te­rial that might oth­er­wise have gone to land­fills. Last Novem­ber, it reached a goal of pro­cess­ing 1,800 tonnes of solid waste a day – its full ca­pac­ity.

The own­ers were con­sid­er­ing a plan ear­lier this year to in­crease the amount of waste pro­cessed by the fa­cil­ity by 90,000 tonnes a year.

The 2017 fig­ures for the com­pany be­hind the fa­cil­ity in­clude a €6.6m loss on in­ter- est rate swaps, €13.5m in in­ter­est, and €37.4m lost on the ex­tin­guish­ment of debt.

In De­cem­ber last year, Mac­quarie’s Green In­vest­ment Group (GIG) ac­quired a 50pc stake in the Dublin waste-to-en­ergy plant, pay­ing €136m in cash.

Co­vanta CEO Stephen Jones told news agency Bloomberg at the time that the US group’s to­tal eq­uity in­vest­ment in

Burn­ing am­bi­tion:

The Co­vanta plant in Ringsend has reached its full ca­pac­ity of pro­cess­ing 1,800 tonnes of solid waste a day the Dublin waste-to-en­ergy fa­cil­ity was be­tween €150m and €175m.

“With GIG’s in­vest­ment into the fa­cil­ity for a 50pc stake, we are get­ting most of our in­vest­ment back, at €136m, which en­ables us to fund the new growth projects in the UK,” he said.

“There is a land­fill levy in place in both Ire­land and the UK, and this sets a fairly high gate fee for waste dis­posal in those coun­tries,” said Mr Jones at the time.

The lat­est set of ac­counts for Dublin Waste to En­ergy show that it had share­holder funds to­talling €154m at the end of 2017. The com­pany di­rectly em­ployed just three staff mem­bers dur­ing 2017, all of them man­agers. Their com­bined pay for the year was €683,000.

In De­cem­ber last year, the firm re­fi­nanced se­nior and ju­nior debt.

The new re­fi­nanc­ing pack­age in­cluded €396m of se­nior se­cured project debt un­der a credit fa­cil­ity agree­ment be­tween the firm and var­i­ous lenders.

The pro­ceeds of the new fi­nance and other funds were used to re­pay a se­nior term loan that was due in 2021, a ju­nior term loan that was to fall due in 2022, and other trans­ac­tion-re­lated fees and ex­penses.

Tranche A of the new se­nior term loan car­ries a 3pc in­ter­est rate, while tranche B car­ries a 2.77pc rate. In­ter­est on tranche C is cal­cu­lated as the six-month Euri­bor rate, plus 2.15pc.

Last month, Co­vanta re­ported third-quar­ter re­sults, with rev­enue for the pe­riod ris­ing to $456m (€400m). It made a net loss of $27m (€23.6m).

Co­vanta’s global waste-to-en­ergy fa­cil­i­ties con­vert ap­prox­i­mately 20m tonnes of waste into elec­tric­ity.

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