As part of the project development agreement, the firms will build the Rookery South energy recovery facility, which will generate electricity required to power up to 65,000 homes.
Both the firms are also planning to jointly own and secure financing for the project, which received planning approval under the UK’s Development Consent Order procedures in 2013.
The facility is designed to process up to 480,000t of municipal, commercial and industrial residual waste annually to generate low carbon energy.
Veolia will be responsible for providing the waste to the facility while Covanta will be the project operator.
Covanta senior vice president Matthew Mulcahy said: "The facility will provide a vital outlet for the sustainable disposal of residual waste and deliver clean, renewable power to the grid."
Expected to create 300 jobs during construction phase, the project will also export steam to support a local district heating system.
Veolia UK & Ireland senior executive vice-president Estelle Brachlianoff said: "This project will contribute to increased landfill diversion and will help the UK meet its carbon reduction commitments.
"The scheme will also create direct employment and boost the local supply chain as well as helping meet our future energy needs."
The team is planning to commence construction of the waste to energy facility by late 2017 and complete in 2020.
Image: Illustration of Rookery South energy recovery facility in the US. Photo: courtesy of Veolia.
