FCC Medio Ambiente SA (FCC) has won the competition to design, construct, finance and operate the facility, which will be fuelled by waste collected by both councils that would otherwise go to landfill.

The joint Zero Waste partners aim to sign the 25-year contract in 2015, with FCC operating on site by 2018. This will be alongside a food waste treatment plant which is currently under construction on the Zero Waste Parc next to the Millerhill Marshalling Yard in Midlothian.

The contract to process up to 135,000 tonnes of mixed waste annually will provide a long-term, competitively priced solution for the recovery of value from the landfill waste collected by City of Edinburgh and Midlothian Councils.

It is hoped the project to treat both food and landfill waste on the site, creating renewable energy in the process, will help both authorities reach the national recycling target of 70 per cent by 2025 and the national landfill diversion target of 95 per cent by 2025.

Councillor Lesley Hinds, environment convener for City of Edinburgh Council, said: “This is a key part of our long term strategy on the journey to drive down landfill waste. Our priority is to encourage the public to cut down on waste and to fully engage in recycling. This facility will ensure that any waste remaining after recyclable materials have been separated out will be treated as a resource and no longer disposed of in a landfill site.”

Councillor Jim Bryant, cabinet member for economic development at Midlothian Council, said: “FCC’s proposal offers a local solution that will benefit both partner councils equally. I am delighted with the economic benefits and opportunities which the regeneration of this brownfield site presents and I will be particularly keen to see FCC develop a local heat network that can link into some of the other exciting projects that are set to transform this area.”

The details of the agreement are now being worked up with a view to signing the contract by the middle of next year.