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Infrastructure Guarantees

Volume 569: debated on Tuesday 22 October 2013

UK Guarantees was announced in July 2012 with enabling legislation, the Infrastructure (Financial Assistance) Act 2012, receiving Royal Assent on 31 October 2012.

Today I am announcing that 40 projects, worth £33 billion, are now “prequalified” for the UK Guarantees scheme. A robust assessment and due diligence process is required before final approval of a guarantee can be given, but this means that these projects are eligible for support. The Government have already announced that the guarantee scheme is being offered to help support the Northern line extension, the Mersey gateway bridge and Hinkley Point C. In addition, the following projects have agreed to be listed on the website:

Able Marine Energy Park, Humberside

Chinook Energy—Renewable Energy from Waste

Countesswells Development, Aberdeen

Five Quarter Energy Holdings Limited—Deep Gas Winning

Gasrec plant and refuelling stations

Melius Energy—Avonmouth biomass power generation

Intergen UK Development Ltd—Gateway Energy Centre

Intergen UK Development Ltd—Spalding Expansion

Islandmagee Gas Storage Facility

Neart na Gaoithe Windfarm

Tilbury Green Power—waste wood-fired power generation

University of Northampton

University of Roehampton

In April 2013, the Government approved a guarantee for £75 million to Drax Finance Ltd to finance the partial conversion of a coal-fired power station to biomass.

UK Guarantees was launched to address constraints in the long-term debt markets by providing a sovereign-backed guarantee to help infrastructure projects raise debt finance. In exchange for a guarantee the borrower will pay a fee, determined by the nature of the guarantee and the risks inherent in the project. Guarantees for up to £40 billion in aggregate can be offered under the initiative.

The Government will report to Parliament on the financial assistance given as guarantees in line with the requirements set out in the Infrastructure (Financial Assistance) Act 2012.