UK: New Project Pass ‘First Hurdle’ in Securing Government Infrastructure Guarantee

Energy, road and rail projects worth £33 billion have passed the first hurdle in getting a government infrastructure guarantee, Chief Secretary Danny Alexander has announced today.

Forty projects are now at the stage known as pre-qualification, meaning they are eligible for the UK Guarantee scheme. Over half that have pre-qualified are energy projects, helping ensure Britain develops a sustainable future energy supply.

While further discussions, assessment and due diligence remain, the move could see them secure government agreement to act as a guarantor for a project giving private lenders confidence that they will get their money back if the project cannot pay. If the government gave a guarantee it would be for a proportion of the capital value of the project, and the scheme is authorised to issue up to £40 billion of guarantees in total.

Of the £40 billion of guarantees available, the government has already awarded a £75 million guarantee to power plant Drax for their £700 million programme to partially convert the UK’s biggest coal power station to biomass. The power station will produce 7 per cent of the UK’s electricity with the biomass conversions set to be up and running over the next 3 years.

16 of the pre-qualified projects have agreed to be named.

The new pre-qualified projects named today are:

  • Helius Energy – Avonmouth biomass energy generation is a 100MW capacity facility in the South West expected to produce energy for the national grid, costing around £300 million to construct and creating approximately 450 full time jobs during the construction phase
  • Islandmagee gas storage project in Northern Ireland worth £400 million which will be capable of storing up two month’s worth of Northern Ireland’s total gas requirement
  • 2 Intergen gas-fired power generation projects at Spalding in Lincolnshire and Gateway Energy Centre in Essex, the latter being an investment of £600 million
  • Countesswells mixed use Development in Aberdeen, Scotland which will see 3000 new homes built alongside business spaces and retail outlets
  • Neart Na Gaoithe 450MW Windfarm in the outer Forth Estuary, Scotland
  • Able Marine Energy Park, a port facility to support the manufacture, assembly and installation of offshore renewable technologies on Humberside
  • Chinook Energy renewable energy from waste plants around the UK
  • Gasrec expansion of its network of refuelling stations for commercial vehicles across the UK to access Bio-LNG, an alternative energy efficient fuel
  • University of Roehampton campus redevelopment
  • Tilbury Green Power 60MW waste wood fired power generation plant in Essex
  • relocation of University of Northampton from its current campus into Northampton Enterprise Zone
  • 5 Quarter Energy plant to process unconventional gas extracted from below the North Sea to create low-cost energy for British manufacturing and new jobs in the North East
  • Ineos Grangemouth Ethane Plant near Falkirk, Scotland– a project to build ethane importation and storage facilities

Press release, October 22, 2013