UK Guarantees was announced in July 2012 with enabling legislation, the Infrastructure (Financial Assistance) Act 2012, receiving Royal Assent on 31 October 2012.
UK Guarantees was launched in response to 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 a fee will be charged to the borrower, 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 are confirming that it has approved a guarantee for £257 million to Merseylink plc for the design, construction and operation of the Mersey gateway bridge PPP project.
The Government will report to Parliament on the financial assistance given in line with the requirements set out in the Infrastructure (Financial Assistance) Act 2012.