Drax secures £75m for biomass plans
DRAX today announced Government backing for funding for its plans to convert from coal to biomass fuelled power generation.
The power station operator has agreed a £75m loan guaranteed by the Treasury.
The £75m amortising loan facility maturing in June 2018 with Friends Life is underpinned by a guarantee from HM Treasury issued under the Infrastructure UK Guarantee Scheme and will replace £50m of the £100m loan facility it agreed with the Green Investment Bank in December.
Drax said that the new facility had a “competitive” cost, provided it with additional liquidity, ensured it had a “smoother profile” of debt maturities and secured Treasury backing for its plans to convert three generating units from coal to biomass.
The addition of the £75m means that Drax’s funding programme now includes £190m from an equity placing last October, a £100m loan with Prudential and M&G UK Companies Fund, £50m from the UK Green Investment Bank and a £400m revolving credit facility maturing in April 2016.
Tony Quinlan, finance director of Drax, said: “This further strengthens our balance sheet, as we progress our project to transform the largest coal-fired power station in the UK into an electricity generator fuelled predominantly by sustainable biomass.
“The benefits are multiple, from securing jobs at Drax and across the UK in the supply chain to providing low carbon, cost effective and reliable renewable power for the consumer. We are delighted to secure the support of Friends Life and Infrastructure UK.”
