Brodies LLP has completed the project financing of a new 1MW anaerobic digestion plant at Carr Farm in Lancashire. This is the first time that an anaerobic digestion plant has been project financed in the UK, and marks a crucial step in the development of the sector. A team of six lawyers comprising finance, projects, energy and property experts worked on project, advising The Co-operative Bank plc which provided the loan for the plant.

The development is particularly important given that the UK Government is now consulting on the ‘grandfathering’ of ROC support of bio energy projects and has indicated that it is minded to grandfather anaerobic digestion plants. Without grandfathering there is a risk that the level of support for a project can be changed midway through the project, so it is crucial to unlock funding to the sector.

The developer of the Carr Farm project, Farmgen, is planning to roll out the concept to further projects around the UK. Keith Patterson, head of projects at Brodies LLP and a member of its renewable energy group, said: “The development of the market has been hampered by the unpredictability of fuel supply arrangements and the unavailability of finance. However, the combination of grandfathering and the completion of the first project financed scheme could prove the spur the sector needs to start to follow through on the sector’s potential. The sector has some advantages over wind as generation is not subject to the vagaries of the weather, and can therefore provide baseload power.”