Ground-breaking marine energy finance deal with Barclays to drive Aquamarine Power onto national grid
Aquamarine Power, the pioneering wave energy company, has agreed a £3.4 million loan with Barclays Corporate in a deal that marks an important milestone for investment in the marine energy sector.
The groundbreaking transaction is the first time a UK marine energy project has succeeded in securing bank debt finance.
Aquamarine Power’s Oyster wave power technology captures energy in nearshore waves and converts it into clean sustainable electricity. The newly announced five year loan will provide funds Aquamarine Power needs to complete a 2.4MW Oyster array, located at the European Marine Energy Centre (EMEC), Orkney.
The array will comprise three of the company’s next-generation Oyster wave power devices. The company successfully installed its first 800kW Oyster 800 device at Billia Croo near Stromness in Orkney last month (pictured). Two further devices will be installed in 2012 and 2013.
The company previously installed a single full-scale 315kW Oyster 1 device at Billia Croo in 2009.
The loan will be repaid over five years from revenue generated by the 2.4MW array.
“This deal is a major step forward for the marine energy sector,” says Aquamarine Power CEO 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.”
Jan Love, Director of Project Finance for Barclays Corporate Scotland, celebrated the deal as “transformational” for the company, adding: “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. Barclays has played a major role in backing high quality renewable developers over the last decade and we have the experience to work successfully with strong management teams such as Aquamarine Power’s. We look forward to supporting the company through the key milestones as additional Oyster devices become operational in 2012 and 2013.”
The deal is the second completed this year by Barclays Corporate Renewable Energy Team. In April Barclays 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.
The Oyster project has been supported through grant funding awarded by Scottish Enterprise and the Carbon Trust Marine Renewables Proving Fund.
About Barclays Corporate
With a clear focus on quality relationships, Barclays Corporate provides integrated banking solutions to businesses with an annual turnover of more than £5 million in the UK and large local companies, financial institutions and multinationals in non-UK markets. We facilitate the success and growth of our clients by providing lending, risk management, cash and liquidity management, trade finance and asset and sales financing. Additionally, our clients benefit from the breadth of the Barclays Group, through access to the investment banking services of Barclays Capital including debt and equity capital markets, the private wealth management expertise of Barclays Wealth, and the card and payment services of Barclaycard. Barclays Corporate employs over 10,000 people globally. For more information please visit www.barclayscorporate.com.
Barclays is a major global financial services provider engaged in retail banking, credit cards, corporate and investment banking and wealth management with an extensive international presence in Europe, the Americas, Africa and Asia. With over 300 years of history and expertise in banking, Barclays operates in over 50 countries and employs over 145,000 people. Barclays moves, lends, invests and protects money for customers and clients worldwide. For further information about Barclays, please visit our website www.barclays.com.
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