The two will work together to bring the project to financial close, expected later this year. The agreement provides a mechanism for Shanks to acquire Babcock's waste business after closing.
The contract for Wakefield Metropolitan District Council will support the council in its landfill diversion strategy and it will see 200,000t of municipal solid waste a year processed at facilities in South Kirkby and across the district.
"This will bring the total of material handled by Shanks under PFI/PPP agreements to approximately 1.3m tonnes," said Shanks chief executive Tom Drury.
Joanne Roney, chief executive of Wakefield Metropolitan District Council, said: "We are very pleased that Babcock and Shanks have entered into this agreement and I look forward to working with the team to move the project to financial close".
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