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Bank has set aside further £67m upon XLCC achieving specific development and funding milestones
UK Infrastructure Bank (UKIB) has made an investment in subsea high voltage direct current (HVDC) cable manufacturer XLCC for a new factory in Hunterston in Scotland.
The funding consists of an initial £20m from the UKIB with an option to invest a further £67m upon XLCC achieving specific development and funding milestones.
This investment demonstrates the bank’s commitment to working with private investors to support the government’s Clean Energy Mission to make the UK a clean energy superpower and accelerate to net zero.
UKIB’s financing will help XLCC develop its factory (image showing factory rendering) in Hunterston, Scotland, which once completed will have capacity to produce thousands of kilometres of HVDC cable each year.
UKIB’s commitment is complemented by additional investment from existing and new investors.
This is incremental to the funding of over £40m raised by the company to date, to design the product, complete detailed design activities for the factory and to achieve full planning permission at the site.?
Once complete the Hunterston factory will create around 900 permanent jobs including over 200 apprenticeships, meaning the factory is also helping to create the manufacturing skills the country needs to support the growth of the UK as a global hub for offshore wind.
Industry regulator Ofgem has welcomed the bank’s focus on capacity additions, and the acceleration of the domestic supply chain for the critical infrastructure required to deliver these vital grid projects.
UKIB chief executive John Flint said: “Industry projections indicate that demand for subsea cables will soon exceed existing supply chain capacity.
"Our support for XLCC is intended to provide confidence to the market, crowding private investment into this sector to boost production capacity in an industry set to have a significant impact on the UK‘s transition to net zero.”
XLCC chief executive Ian Douglas added: “XLCCs mission is to provide critical elements of the infrastructure that is essential to the energy transition and will reduce project costs to the benefit of the UK consumer.
“The creation of the Hunterston facility in Scotland brings significant investment to the UK, creating highly skilled jobs in advanced manufacturing and project management for decades to come.
“We welcome the foresight of UKIB and our other investors in recognising the opportunity to create a new force in HVDC cables to address both domestic and global requirements.”
Scottish Renewables Director of Offshore, Colin Palmer, said: “This welcome package of investment will provide a shot in the arm for Hunterston and Scotland’s wider renewable energy supply chain.
“Building the advanced manufacturing capabilities here in Scotland for renewable energy is crucial for securing the highly skilled jobs and vital inward investment needed for our just transition.
“The development of HVDC cable manufacturing at Hunterston is another positive signal at a time confidence is needed for our industry, particularly for offshore wind and electricity networks which are critical for energy security.
“It also demonstrates that the direct economic benefits of our clean energy transition can be felt across all corners of the country.” |
