A 40MW waste wood-fired power plant is set to be built in Stockton-on-Tees, north east England.
An investment worth £160 million will be used to develop the facility.
The biomass plant is expected to generate enough electricity to power 70,000 homes.
It is estimated to process around 250,000 tonnes of waste wood per year which will be diverted from landfill sites.
The project will create up to 500 jobs.
The plant will be built by Babcock & Wilcox Vølund A/S, Eco2 Ltd will manage the facility once it is commissioned and Glennmont Partners is the owner of the project.
Joost Bergsma, CEO of Glennmont Partners, said: “We have completed this deal in the midst of a difficult regulatory environment and it is to the credit of all the parties involved that this project now has the investment it needs to go on to create jobs and power the local area.”