The successful financing of Protos Carbon Capture and Storage (CCS) – the UK's first full-scale carbon capture project for an energy-from-waste (EfW) facility – is another landmark CCS deal for MUFG and demonstrates its ability to advise on and execute complex and innovative clean technology projects. Over the last year, MUFG has acted as MLA on three other groundbreaking CCS projects (Net Zero Teesside Power, Northern Endurance Partnership and HyNet North West), reinforcing its CCS track record and position as a leading, trusted global project finance bank.

Protos CCS is a trailblazing industrial project within the HyNet North West CCUS cluster, spanning Liverpool, Manchester, and parts of Cheshire in northwest England. Once operational, the facility will be able to capture around 370,000 tonnes of CO2 each year and transport it via the HyNet North West pipeline for permanent storage in depleted gas fields beneath Liverpool Bay. Protos CCS will serve as a blueprint for the decarbonisation of the hard-to-abate EfW sector, which is seen as a critical component in achieving the UK's 2050 Net Zero target.

The Challenge

To fund the construction of Protos CCS, the sponsor, Encyclis (100% owned by EQT), needed to raise commercial bank financing alongside grant payments from the UK Government. Due to the project's pioneering nature and complexity, Encyclis required a banking partner with the skills, knowledge and experience of advising on and financing complex projects.

Execution

Based on its experience and track record in the EfW and CCS sectors, and its strong relationships with Encyclis, MUFG was appointed as the sole Financial Advisor on the deal. Drawing on this experience, the team structured a first-of-a-kind financing that helped to de-risk the project by negotiating a bankable risk allocation and revenue model with the Department for Energy Security and Net Zero (DESNZ).

The team also supported Encyclis in securing a UK government funding grant, covering a proportion of the project's total capital costs. The project will operate under DESNZ's Waste Industrial Carbon Capture business model, through which the Low Carbon Contracts Company will provide a government-backed, fixed-term revenue contract. Together, these measures significantly enhanced the project's overall bankability.

Results

With MUFG's expertise, Encyclis achieved financial close on Protos CCS in October 2025. The new funding will enable Encyclis to take a major step toward decarbonising the EfW sector.

Mark Burrows Smith, CEO of Encyclis, said: “We are delighted to be moving forward with this landmark project at Protos ERF, delivering the first full-scale carbon capture project in the waste sector. We appreciate the valuable support provided by MUFG as our Financial Advisor and thank them for their outstanding work in helping us reach this important milestone."

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