(Bloomberg) -- The Macquarie Group-backed company behind a long-delayed power plant in northern England is considering raising as much as £150 million ($188 million) from investors so it can start operating in July.

MGT Teesside Ltd., which owns and operates Tees Renewable Energy Plant, will raise the money to bolster liquidity and cover costs including debt coming due in June, according to people familiar with the matter. The company is a joint venture between Macquarie, Danish pension fund PKA and a group of Korean investors.

MGT is considering options including an equity injection, the people said, asking not to be named discussing private information. It’s also discussing with lenders whether part of the fundraising includes debt, they said. One of the parties that has shown interest in injecting equity is Daniel Kretinsky’s EPH, they added. A person with knowledge of EPH’s position said the company isn’t interested.

A spokesperson for EPH declined to comment, as did Macquarie’s and PKA’s. A spokesperson for MGT Teesside didn’t reply to a request for comment.  

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The talks come after years of construction delays and setbacks for the project, including including fires and problems with the boiler. The company changed contractors twice, first because Abengoa SA— which was working in tandem with Toshiba Corp. — ran into financial trouble, and then because the consortium formed by Tecnicas Reunidas SA and Samsung C&T Corp. didn’t meet the agreed timings.

If successful, it would operate at a capacity of 299 megawatts and be among the world’s largest power plants to run only on biomass, a fuel whose sustainability credentials have faced increasing scrutiny from environmental campaigners.

Biomass currently produces about 10% of UK electricity, largely from Drax Group Plc’s former coal station in Yorkshire.

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The £150 million figure is at the high-end of the range needed by the company to ensure it doesn’t need to tap the markets again soon, the people familiar said. Shareholders injected an additional £100 million last year to finish the project, according to the earnings report for the year ending in March 31 2022, the latest available. 

Crucial Contract 

Like other UK biomass-fired plants, Tees REP has a contract-for-difference subsidy agreement that guarantees it almost £150 pounds per megawatt-hour of power produced. Funded by consumer bills, that subsidy will be critical for the plant, which would otherwise be loss-making.

In October, the plant did a test, operating at 80% capacity for 10 days, in order not to lose that contract. The test was passed and the company has since been focused on finishing the works, aiming to start producing energy in July, according to the people familiar.  

The debt stack was £945.3 million as of the end of March 2022, according to the latest earnings available. Of that amount, £77.8 million was maturing in less than one year, with £191 million coming due in a range of one to five years.

The first payments of its senior loans were originally due in 2020, when it was expected to be running. But the company agreed with its lenders to delay due to technical problems and the impact of the pandemic on timings, the people familiar said. 

(Updates the third graph to add that a person familiar with EPH’s position said the company isn’t interested in injecting capital into the project.)

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