WORK on a £650m energy plant predicted to deliver hundreds of jobs will start in weeks.

MGT Power has finalised funding for its Tees Renewable Energy Plant.

Bosses say the factory, at Teesport, between Redcar and Middlesbrough, will be one the world’s largest biomass power stations, providing electricity for 600,000 homes by burning wood chips and pellets imported predominantly from the US.

Site preparation will start in the coming weeks, with construction expected to begin towards the end of 2016.

The plant is due to send its first energy to the National Grid in 2020.

Officials say the factory, overseen by subsidiary MGT Teesside, will create around 100 permanent full-time jobs across port handling and offloading and support at least 600 construction posts.

However, they added hundreds more positions will be strengthened across the local supply chain, with PD Ports’ Teesport base lined up to support the scheme and Stockton energy and process industry company, PX Group, contracted to back construction work.

Darlington’s Whessoe Engineering will also provide assistance from its position within South Korea’s Samsung Construction and Trading (SCT).

SCT will build the plant alongside Spain’s Tecnicas Reunidas.

Ben Elsworth, MGT Teesside chief executive, said: “This project has had to overcome many hurdles but we have now successfully reached the next stage despite the difficult financing environment.

“Support from the local region and a big team effort from all the different parties involved has been instrumental in getting there.

“We can’t wait to get work started and make this project a huge success for Teesside.”

Mr Elsworth previously received MGT had received approval from the European Commission for an agreement with the Department of Energy and Climate Change to guarantee a fixed electricity price for 15 years.

He also announced the factory’s boiler plant would be provided by Amec Foster Wheeler, which runs its European engineering base in Darlington and has offices in Middlesbrough.

Ian Clifford, PX Group chief executive, said he was delighted the company was helping a local scheme.

He added: “The fact the plant is on our doorstep and increases our involvement in the renewable energy sector makes it doubly satisfying.”

Amid the latest decisions, Macquarie Capital and Macquarie Commodities and Financial Markets and Danish pension fund, PKA, have become joint owners of MGT Teesside and will manage the plant.

Mark Dooley, Macquarie Capital Europe’s head of infrastructure, utilities and renewables, added: “We are delighted our partnership with MGT will enable the delivery of this important project for the North-East economy.

“We are committed to supporting the UK’s move to green energy and we see the Teesside Renewable Energy Plant as a key component of this transition.”