A plant that generates power from Edinburgh householders’ food waste has been acquired by London-based private equity investors in a move that shows confidence in the renewable energy technology.

Ancala Partners bought the Millerhill anaerobic digestion facility from Kelda Water Services for an undisclosed sum.

Millerhill uses discarded food collected by the City of Edinburgh and Midlothian councils and waste from businesses to generate enough electricity to power around 3,300 homes.

It forms an important part of the councils’ efforts to meet the Scottish Government target of no more than five per cent of waste being sent to landfill by 2025.

Their plans for the scheme sparked concern among local residents about potential smells and noise.

However, the facility has been in operation for around 18 months.

Ancala managing partner Spence Clunie said the plant was an excellent asset serving an important market.The deal showed the firm’s ability to promote businesses that benefit local communities.

Ancala bought a portfolio of seven anaerobic digestion plants through the acquisition of Biogen from Kier construction group and farming and property combine Bedfordia in April.

It has shown enthusiasm for investing in assets that can be used to generate stable revenues under long term contracts such as North Sea pipelines.

Ancala bought the Green Highland Renewables hydro business in 2015 and sold it on to the Gupta family’s GFG metals to energy group in December.

Methane gas is produced at Millerhill and converted into electricity. The facility also converts food waste into a biofertilizer.