StockMarketWire.com - Stobart Group Ltd has signed a 14-year index-linked fuel supply agreement in relation to a project to construct a 40MWe waste wood-fuelled biomass plant near Margam, South Wales ('Margam'), which has successfully achieved financial close.

The fuel supply agreement is the largest supply contract by volume entered into by the Group.

Highlights:

Margam is scheduled to commence operations in March 2017 and will generate revenue for the Group's Energy Division.

· Stobart Energy will source, process and supply 250,000 tonnes p.a. of recycled waste wood to Margam over 14 years equating to 3.5m tonnes over the life of the agreement (equating to a total contract value in excess of £110m).

· Stobart Energy's Transport business will also be responsible for transportation of the product delivering 250 loads each week to Margam over the 14-year agreement, generating additional revenue for the Energy Division.

· Following on from the recent announcement by the Group on the Widnes Biomass Project, the volumes to be supplied under the Margam agreement mean that we have now secured 50% of the increase required to achieve Stobart Energy's fuel supply target of 2m tonnes p.a. by 2017/18 from the 1m tonnes pa we currently supply.

· The Developer of the Project is Eco2 (developer of other biomass projects at Sleaford, Snetterton, Port Talbot and Brigg).

· The build period will be 24-26 months, with commissioning scheduled for early 2017 and operations to commence in March 2017.

· Stobart Group is not involved in the financing of the project, which is being funded by equity from Glennmont Partners and project finance from a club of lenders.






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