Atlantis, owner of the world’s largest planned tidal stream energy project, MeyGen Limited (“MeyGen”), announced that all conditions were satisfied under the terms of the funding package announced on 21 August 2014 to enable the drawdown of funding for the project.
Financing to fully fund Phase 1A of the MeyGen project has now been fully committed and funds will be released to suppliers and construction contractors to enable the commencement of construction.
A total of £51.3 million has been secured from syndicate members comprising the UK government, through the Department of Energy and Climate Change (“DECC”), Scottish Enterprise, Highlands and Islands Enterprise (“HIE”), The Crown Estate (“TCE”) and Atlantis.
Of the total financing package, an aggregate of £17.5 million is in the form of senior project finance funding, comprising a £7.5 million project finance debt facility from Scottish Enterprise through its Renewable Energy Investment Fund (“REIF”) administered by the Scottish Investment Bank, and £10.0 million of funding from TCE. A further £13.3 million is being provided in the form of direct grants to MeyGen from DECC and HIE.
The balance of £20.5 million is being provided as cash equity investment into Tidal Power Scotland Holdings Limited, the holding company of MeyGen, which has been established to invest in MeyGen and other tidal power projects in Scotland. Of this equity investment, £10.8 million is to be subscribed by Atlantis with Scottish Enterprise, through REIF, having committed to subscribe the balance of equity amounting to £9.7 million, with all such equity to be subscribed in a series of tranches over the coming months.
Once all of this equity has been subscribed, Atlantis’s holding in MeyGen will be 86.5 per cent and Scottish Enterprise’s holding, as a new shareholder, will be 13.5 per cent.
The first stage (Phase 1A) of the project will comprise the installation of four 1.5 megawatt turbines offshore as well as the construction of the onshore infrastructure to support the project.
Three of the turbines will be supplied by Andritz Hydro Hammerfest and one Lockheed Martin-designed turbine supplied by Atlantis.
Construction is expected to commence in Q4 2014 with first power to the grid and revenues earned in H1 2016.
Also, MeyGen recently signed a ten year Power Purchase Agreement with Smartest Energy that will guarantee revenue for the project, both for the electricity supplied to the grid and the 5 Renewable Obligation Certificates that the project will receive for each Megawatt Hour of electricity generated.