Irish biofuel firm nears €40m US deal

A US company part-owned by Irish biofuel business Bedminster is on the verge of winning a €40 million contract.

US-based Waste Options looks likely to develop a facility on Nantucket Island in Massachusetts, that will use waste to generate electricity.

Bedminster, founded by former technology entrepreneur Bill McCabe, owns 50 per cent of Waste Options. It has its headquarters in Rhode Island, on the east coast of the US. The company already operates a waste processing facility on Nantucket.

That contract, with the local department of environmental protection, is worth $120 million (€92 million) over 20 years, dating from 1997. The new deal will add a further $50 million to the existing contract.

The project involves a process called gasification. This involves converting solid and sludge waste to gas, which is used to generate electricity. Waste Options says its plant will produce between two and three megawatts of electricity. It is understood this is the first of a number of waste-to-energy projects that Waste Options intends pursuing in North America.

Company president Whitney Hall recently told the local media that gasification would be the best arrangement for Nantucket.

"We're quite confident that it would be economically feasible and produce electricity," he said.

A key issue for the area is that the Massachusetts state government has banned incineration. Gasification does not qualify as incineration.

Under its current contract, Waste Options has been providing a landfill, recycling and composting service in Nantucket.However, Nantucket cannot deal with some material in this way. Without the new deal, it will have to ship 1,000 truckloads of waste like metal, aluminium, plastic and other materials off the island for the equivalent of €100 a ton.

Last May, Mr McCabe sold a 10 per cent stake in Bedminster to US investment bank Goldman Sachs for €7.7 million, valuing the business at €77 million. At the time, the company indicated Goldman could increase its stake.

Mr McCabe came to prominence in the late 1990s as the founder of e-learning group, Smartforce. He owns a controlling stake in Bedminster through Oyster Capital, which joined forces with Advanced Environmental Solutions to form Bedminster in 2004. It has a €200 million waste-to-energy contract in New York and sells a system to convert organic waste to fertiliser.