The Chief Secretary to the Treasury (Danny Alexander)
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 gov.uk 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.