Pension funds in Denmark and Norway are investing in a new biomass-fired combined heat and power plant project in Kent in the UK worth £160m (€188m) via the Copenhagen Infrastructure II fund.

The plant is set to generate enough energy for 50,000 homes when complete.

The fund, run by Copenhagen Infrastructure Partners (CIP), has 19 institutional investors including Danish pension funds PensionDanmark, Lægernes Pension, PBU, JØP, DIP, PFA, AP Pension, SEB Pension Denmark and Lærernes Pension.

Norwegian pension funds Oslo Pensjonsforsikring (OPF) and KLP are also among the investors, along with the Swedish division of SEB Pension.

Together with Danish engineering and contracting firm Burmeister & Wain Scandinavian Contractor (BWSC), which will build the plant developed by UK firm Estover Energy, the Copenhagen Infrastructure II fund has signed a deal to buy 100% of the project in Kent.

The fund will invest around 80%, and BWSC around 20%, while Estover Energy will hold a minority interest in the project.

The biomass power plant will have a capacity of 27.8 MW and be fired mainly with virgin wood sourced locally in the UK, the first said.

PensionDanmark’s chief executive Torben Möger Pedersen said: “The Kent power plant is yet another example of our strong business relationship with CIP and BWSC in extension of our investment in the Brigg biomass power plant earlier this year, which we’re extremely pleased with.”

PensionDanmark announced its investment in the Brigg plant in Lincolnshire in the UK back in 2013, and the plant was officially opened in late May this year.

“The joint venture model we’re applying provides an attractive return to PensionDanmark with limited risk,” Möger Pedersen said.

He said it also helped the pension fund contribute to the transition towards a green economy and increase Denmark’s energy technology exports.

“We see a strong potential in this type of partnership,” he said.

The Kent plant is expected to start operating in the summer of 2018.

BWSC, in addition to building the plant, will operate and maintain the installation on a contract for up to 20 years.

The plant will be able to produce power equating to the consumption of 50,000 households, CIP said, with heat and some of the power generated being delivered to the nearby science park Discovery Park.

All biomass required will be sourced under a long-term contract with UK wood supplier Euroforest, and the plant will deliver CO2 savings of around 100,000 tonnes every year.