First UK hydro scheme to be backed by a bank
A pioneering wave energy scheme is the first of its kind to get debt funding from a bank, according to the people behind the project.
Aquamarine Power said today (September 5) it has agreed a £3.4M loan with Barclays in a deal to support its Scottish-based Oyster wave power array.
The equipment, a 2.4MW array at the European Marine Energy Centre (EMEC) off the coast of Orkney, is now backed by the five year loan.
Eventually the array will be made up of three of the company's next-generation Oyster wave power devices.
It installed its first 800kW Oyster 800 device at Billia Croo near Stromness last month and is due to add two more in 2012 and 2013.
The company installed a single full-scale 315kW Oyster one device in 2009 at the same site.
"This deal is a major step forward for the marine energy sector," says Aquamarine Power chief executive, Martin McAdam.
"It shows Barclays has the confidence and flexibility to fund the right marine energy project - with a return based on future energy production.
"For us this opens the door to securing debt finance for our first pre-commercial 10MW project which will commence in 2014. The key for the industry will be finding the means to secure debt for these early-stage projects without the need to rely on parent company support. Barclays is definitely showing the way."
Barclays Corporate Scotland director of project finance, Jan Love, added: "This is a significant moment for Aquamarine Power; it demonstrates our confidence in the business model and provides a blueprint of how visionary companies can achieve their commercial aims with the right support."
The deal is the second completed this year by Barclays Corporate Renewable Energy Team, in April it delivered a multimillion pound funding deal for the 28.6MW Drone Hill Wind Farm in the Scottish Borders.
Drone Hill, owned by AES Corporation's subsidiary AES Wind Generation, secured a combination of project financing through a long term loan of £22.8m from Barclays Corporate and AES Equity of £15.8m, at a total project cost of £38.6m.