A multi-million dollar waste to energy initiative in Chatham-Kent (CK) is progressing with some staff recommendations.
A report set to be presented to Council on Monday evening suggests forming a Municipal Services Corporation to manage the proposed Renewable Natural Gas (RNG) Energy from Waste facility and entering into a $25 million loan agreement between the municipality and this new corporation, pending Council’s approval for investing in the facility.
According to staff, Infrastructure Ontario will only provide funds directly to the municipality, which would then lend those funds to the newly proposed corporation for the project.
“The municipality could not borrow the entire required debt amount from Infrastructure Ontario. The project team has made the decision to recommend borrowing $25M from Infrastructure Ontario for a term of 15 or 20 years, with the rest of the debt being secured from private commercial sources,” said administration.
The waste to energy project represents a collaboration between CK and Greenfield Global, proposing an anaerobic digestion facility that will convert industrial, commercial, and institutional organic waste into Renewable Natural Gas. This aims to reduce landfill use and generate a clean energy source.
The proposed facility in CK has been under development for five years and is expected to benefit multiple municipalities, as noted in the report.
It’s also anticipated to offer significant environmental and operational advantages while supporting Council’s climate action and waste management objectives.
Administration pointed out that the project has now secured $45 million through federal Clean Fuels Fund support structures as an interest-free loan repayable over ten years once it becomes profitable.
Additionally, around $5 million has been obtained from Federal Economic Development Agency funding, bringing total financial support from higher levels of government to about $60 million.
The estimated cost of constructing the plant currently stands at approximately $160 million.
The municipality holds a 40 percent stake of the $40 million equity ($16 million) and is accountable for 40 percent of the expected $60-$70 million debt financing needed after federal funding is deducted based on final capital cost estimates.
“Costs that escalated during 2022 and 2023 have now stabilized and engineering work has been ramped up to be ready for tender this summer,” staff wrote in their report. “Costs are aligning with expectations of a successful project. Complete financial projections along with a review from a third-party auditor will accompany the final go/no go decision report in April. This report will include essential information for both Council and Greenfield Global Board of Directors regarding whether it makes financial sense to approve this joint venture.”
Council plans to make its decision on April 27.
If approved, construction for the anaerobic digester will take place on Bloomfield Road in Chatham across from Greenfield Global.
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