Infrastructure projects worth £33 billion have passed the ‘first hurdle’ in getting a government infrastructure guarantee the Treasury has announced. More than half of the 40 projects now at the ‘pre-qualification’ stage are in the energy sector.
Reaching this stage means they are now eligible for a government guarantee subject to further negotiation and assessment.
The scheme is designed to give private lenders assurance they will get their money back if a project doesn’t pay off. It is authorised to issue up to £40 billion of guarantees in total but only covers a proportion of the capital value of a project.
The projects now through to the pre-qualification stage include a 100MW biomass plant in Avonmouth costing around £300 million, a 450MW wind farm in the outer Forth Estuary and a project to build facilities for the import and storage of ethane at INEOS’ troubled Grangemouth site in Falkirk.
The £16 billion Hinkley Point C nuclear power plant is among those previously announced to have reached the pre-qualification stage.
The government has also already awarded a £75 million guarantee to Drax for its £700 million programme to partially convert its coal power station in Yorkshire to biomass.
Danny Alexander, Chief Secretary to the Treasury said: “Having passed the first hurdle these companies know the government is there to help if they need it. I hope [the] announcement will encourage even more businesses to consider how they can take advantage of a guarantee.”