As of January 2012 small companies hoping to enter the UK marine market will see financial entry barriers significantly reduced. The Crown Estate, which owns the rights to the UK’s waters, has decided to drop the level of parent company financial guarantees it requires from wave and tidal customers.
For projects that have already won rights in the Pentland Firth and Orkney Waters, subsidiary companies will have to rely less on their parent company as guarantors- as initial liability measures of £25 million are being dropped to just £5 million per project.
Gareth Baird, The Crown Estate’s Scottish Commissioner said: “We are pleased to be announcing this significant step forward to help drive the UK’s emerging wave and tidal industry, making it more accessible for small businesses. No longer requiring financial security over third party liabilities arising under the lease agreement is a clear example of how we are supporting the growth of the industry.”
The Crown Estate requires developers to provide parent company guarantees or similar forms of security. Until now levels have been partially based on the need to reduce the risk of third party claims against The Crown Estate.