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Energy: Finance

Volume 488: debated on Tuesday 24 February 2009

To ask the Secretary of State for Energy and Climate Change what recent assessment he has made of the availability of debt finance for investment in energy infrastructure projects. (255192)

Large energy companies continue to be able to access both bond and commercial paper markets for investment purposes, with several utilities launching successful debt issues in recent months. The cost of new debt in relation to the risk-free rate has risen relative to the pre-credit crunch situation, but the risk-free rate itself has fallen in recent months. The Government and Ofgem continue to monitor levels of energy investment closely.

Smaller energy firms have found debt financing harder to come by due to the financial crisis, in common with firms in other sectors of the economy. However, many of these firms will be eligible for the Government’s recently-announced schemes to restore the flow of credit to businesses (Working Capital Scheme, Enterprise Finance Guarantee Scheme).