Organics Capital Grant Programme VI

1. Organics Capital Grant Programme VI Advice and Guidance Workshop – England & Northern Ireland Claire Kneller Louise McGregor

2. Agenda • Welcome & introductionLouise McGregorSupply & Scotland Programme Manager • WRAP Organics ProgrammeLouise McGregor - aims & objectives • WRAP Grant Funding Process Claire KnellerProject Manager - Organics • How to apply Louise McGregor & • Claire Kneller • Questions • Lunch at 12.30 • Confidential One-to-One sessions (1pm onwards)

3. Welcome & Introduction Louise McGregor Supply & Scotland Programme Manager - Organics

4. WRAP • WRAP helps individuals, businesses and local authorities to reduce waste and recycle more, make better use of resources and to tackle climate change • Third Business Plan period now complete. • Objectives were : • Landfill diversion of at least 3M tonnes of materials • Increase public participation in recycling by 10% in England (4M) • reduction in amount of food thrown away by consumers and collecting more for composting and recycling

5. WRAP Organics Programme Louise McGregor Supply & Scotland Programme Manager - Organics

6. Organics Programme – Purpose • Food waste is the main source of BMW remaining in residual waste and a significant component of the C&I waste. • Minimisation, collection & diversion into compost or digestate are key themes, to help meet the 2010 and 2013 Landfill Directive targets. • The Organics Programme aims to make a significant contribution to this by: • Increasing the capacity for composting and anaerobic digestion of source-segregated food-included organic waste; • Growing demand for quality compost (BSI PAS100) and AD outputs (proposed BSI PAS110) in existing markets; and • Opening new markets.

7. Organics Programme - Proposed business plan targets • Ensure an additional 400,000 tonnes annual processing capacity for source-segregated food-included organic waste is operational by March 2011 • Ensure £950,000 increased sales (approx equivalent to 250,000 tonne increase) of compost or the outputs from AD into the added value markets of agriculture, field horticulture, landscaping and brownfield site regeneration

8. Capital Grant activities to date • 52 projects supported • Facility types: • 8 new windrow facilities • 14 new or extensions to in-vessel facilities • 25 extensions to existing windrow facilities • 5 involved with blending compost into retail growing media or top dressings • Total WRAP investment = £10.8M • Total programme investment = £47M • Overall approx 800,000 tonnes additional treatment capacity

9. Grant funding process Claire Kneller Project Manager - Organics

10. Why may we use grant funding? • Strategic interventions not on-going subsidy or ad hoc • Consultation with governments and stakeholders • When a specific need in a particular sector is identified.Some past examples: • need to increase UK composting capacity • Need to develop alternative markets for UK glass • Need to encourage adoption of innovative technology in plastics

11. How do we award capital grant funding? • Governed by rules on policy and State Aid • Always through an open competition • Awards are made against well defined evaluation criteria for applications • Applications are assessed by a panel which includes external, independent individuals with expertise in relevant areas • Formal contract put in place to manage delivery

12. Capital Grants - Process • Launch competition – trade press, WRAP website, trade association • Application packs to clarify exactly what is required of projects • 12 weeks to prepare written proposal • Advice available from Organics Capital Grants team • Competition closes • Set assessment period – rigorously assessed by a panel

13. Capital Grants – Process (2) • Proposals which best meet the criteria to deliver WRAP’s objectives for the individual competition are proposed as preferred bidders • Finite budgets – select the best relative projects • Inform all applicants & offer feedback on proposals • Formal contract in place • Project monitor appointed • Payments made against agreed milestones & in line with project spend profile

14. Guarantor • All funding contracts require a guarantor • Guarantor signs contract with recipient • Needed to safeguard public money • Indemnity for the value of WRAP support over construction and 5 years of operation • Options, (in order of preference): • Parent or Holding Company • Bank bond • First charge of assets • Personal

15. Other Issues • WRAP reserves the right to not assess any applicant who fails to meet published scope of competition • EU funding limits can have an impact on percentage of support provided – up to 30% of eligible costs • Implications for double ROCs under Governments Energy Review Report and DBERR advice. • Will try and support other good projects through other forms of Business Support

16. Organics capital timeline 12 Wks Panel assessment Environmental, H&S and financial assessment Launch 4 Apr 08 Deadline 13.30 30th Jun 08 4 Wks Contracts signed 1 Mar 09 Draft contracts On site Environmental Audit Inform applicants 1 Aug 08 FACILITY COMMISSIONED By 31 December 2010 Project build ????????

17. Organics Capital Grant Requirements Louise McGregor Supply & Scotland Programme Manager – Organics

18. Organics Capital Grants • Aims and scope • Priorities and exclusions • Requirements • Evaluation criteria

19. Capital Grant Programme • Aims: • Increase the annual processing capacity for source-segregated food-included organic waste and manufacture added value products • Target: 400,000 tonnes new and sustained processing capacity capable of processing food waste into a product • Programme Scope: • Approx £10M in England & Northern Ireland (a separate programme for Scotland) • Any size of business • Source segregated food-included municipal, commercial and industrial organic waste • Up to 30% funding

20. What we do and don’t want • Priorities: • Source-segregated food waste • Processing municipal and commercial / industrial food waste in one facility • ABPR compliance • Beneficial use of recycled products – compost and digestate • Exclusions: • Mixed waste streams • Manufacture of a fuel or renewable energy only • C&I waste from one company

21. Requirements • Your project must meet the following requirements: • A capital investment (not revenue) to create new or expand existing food waste processing capacity, compliant with ABPR, and manufacturing a product • Located in England or Northern Ireland • Commissioned by 31st December 2010 • Demonstrate the need for support (project viability reliant on WRAP funding)

22. Requirements (2) • Your project must meet the following requirements: • Be commercially sustainable • Have clearly defined and, where possible, secured added-value end markets • Use proven technology – already in commercial operation elsewhere • Use source-segregated biodegradable municipal, commercial and / or industrial food waste that would otherwise go to landfill

23. Evaluation Criteria • Overall Value for money • Technical • Financial • Project Management

24. Evaluation Criteria • Value for money (for all criteria) • Overall performance against all criteria • £/t evaluation • £ of WRAP Support • 5 year total additional tonnage of BMW and C&I food-included organic waste diverted from landfill • £7.50 for in-vessel • AD ?

25. Evaluation Criteria • Technical • Quality of Design and Infrastructure of the project • The suitability and quality of the technology and operational process • Quality and security of arrangements for sourcing the input material • Quality and security of arrangements for marketing and use of the outputs

26. Evaluation Criteria • Financial • Financial robustness of the proposal • Review of cashflow forecasts, including assumptions and throughputs • Demonstration of need for WRAP funding • Financial standing of the applicant • Includes ability to raise co-funding

27. Evaluation Criteria • Project Management • Applicant’s ability to deliver the project and operate the facility • Corporate environmental commitment and overall environmental impact of the new facility • Corporate commitment to Health & Safety

28. How to apply Claire Kneller and Louise McGregor

29. How to Apply • Max 25 pages (double-sided) plus Appendices: • Executive Summary • Section 1 - Technical • Section 2 - Financial • Section 3 – Project Management • Section 4 - Organisational • Appendices

30. Section 1 - Technical • T1 - Quality of Design & Infrastructure of Project • type of infrastructure & equipment to be installed • works to be undertaken • location • technology and process to be used • schematic of site layout, including process description • maintenance regimes • planning conditions or other restrictions

31. Section 1 - Technical • T2 – Technical Scope and Operational Process • Detailed description of each processing stage • ABPR compliance, de-packaging, watering, porosity, aeration, retention, odour control, gas storage etc • Demonstration of suitability of chosen design & technology for waste types • Process flow diagrams & mass / energy balances • Evidence of track record of chosen technology

32. Section 1 - Technical • T3 – Quality & Security of Arrangements for sourcing inputs • Nature, location and quality of supply over 5 years • Anticipated tonnage over 5 years and justification for facility size • Suppliers • Security of Supply • Details of other processing operations in the vicinity

33. Section 1 - Technical • T4 – Quality & Security of Arrangements for marketing and use of outputs • Full description of all outputs and rationale for each • Assurance of compliance with relevant product specifications, e.g. PAS100, PAS110 • Details of each end market and customer • Tonnage estimates per market / customer • Estimated selling price • Marketing & sales plans • Prior marketing and sales experience

34. Section 2 - Financial • F1 – Financial Robustness of application (1) • Full cost breakdown • Total project costs, fully itemised, with and without VAT, in £s • Total WRAP support requested – in £ and as % of eligible costs • Full justification for all costs, particularly if they exceed market rates • Eligible costs calculations

35. Section 2 - Financial • F1 – Financial Robustness of application (2) • Viability of Investment • Must demonstrate that project viability is dependent on WRAP support. Do not assume 30% • Cash flow forecasts for 5 & 10 years, with & without support • include payback, net present value, internal rate of return & hurdle rates • Single ROCs only for AD applications • State and explain ALL assumptions • Spreadsheets on WRAP website

36. Section 2 - Financial • F2 – Financial standing of applicant • Project Financing • How will you finance your project? • Who, how much and when? • Extent to which financing is secure • Identification of Guarantor • Letter of support / evidence • Standing of Applicant and Guarantor • 3 years audited accounts

37. Section 3 - Project Management • P1 – Applicants ability to deliver the project and operate the facility (1) • Full and detailed project plan • What will happen when • Gantt chart indicating key milestones • ordering, delivery, installation, commissioning & operation of plant • planning & licensing / permitting • first delivery of input material & processing • processing at full capacity • justification

38. Section 3 - Project Management • P1 – Applicants ability to deliver the project and operate the facility (2) • Full and detailed information relating to planning • Stage reached • Evidence of discussions • Likely issues • Full and detailed information relating to other regulatory requirements • Assurance from technology provider

39. Section 3 - Project Management • P1 – Applicants ability to deliver the project and operate the facility (3) • Project team who will manage and deliver the project • who & what are their roles (for the project & organisation) • specific skills & experience, especially those relevant to project • demonstrate • Technical and operational track record of applicant and technology provider • Examples of previous sites / operations • Training

40. Section 3 - Project Management • P1 – Applicants ability to deliver the project and operate the facility (4) • External consultants experts to be used • who & what are their roles (for the project & organisation) • specific skills & experience, especially those relevant to project • demonstrate • Details of Quality Assurance or Quality Management Systems in place

41. Section 3 - Project Management • P2 – Corporate environmental commitment and overall environmental impact of the new facility • Environmental Policy • Environmental Impact Statement • Construction and operation • What are the impacts (+ & -) ? • E.g. noise, odour, leachate …. • Mitigation Plans • How will you minimise the negative impacts? • Environmental Commitment and track record

42. Section 3 - Project Management • P3 – Corporate commitment to health and safety • Brief description of project H&S Plans • For existing organisations – current H&S policy • Site H&S records over 5 years • Assurance of ABPR compliance

43. Section 4 - Organisational Information • Registered Address • Status & structure of your company • Board approval • Insurance • Site ownership / status • Previous grant funding information • Your Guarantor

44. Top Tips! • Read the application pack & section 4 ‘How to apply’ carefully • Back up the statements you make – give evidence where you can • Get someone else to read it through before submitting • If in doubt – provide more not less information – assume no prior knowledge • Remember Value for Money is key • If you have questions call the organics capital grants team

45. Questions? Thank you WRAP Organics Capital Grants Team Tel : 01295 819640 Email: organicscapitalsupport@wrap.org.uk