3SE, a joint venture majority owned by waste management group Shanks, has signed a contract worth with Barnsley, Doncaster and Rotherham Councils for the treatment of black bag waste.
The 25-year agreement, worth more than £750m, will see Shanks build a mechanical biological treatment and anaerobic digestion facility at Manvers in South Yorkshire, by 2015.
The plant will process so-called "solid recovered fuel" (plastics and biodegradable waste) and biogas for energy generation, and digestate for compost and fertiliser, with Shanks operating the facility until 2040.
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It's hoped the Manvers site will treat up to 265,000 tonnes of household and commercial waste per year.
Under the agreement, the minority owner of 3SE, SSE will use around half of the solid recovered fuel produced at a new plant at Ferrybridge, West Yorkshire to generate electricity.
Shanks claims when the facility at Manvers is operational it will lead to a saving equivalent to 114,000 tonnes of CO2 every year.
Since the start of the year Shanks' shares have risen 8.8%.
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