Aquamarine Power makes ground-breaking deal with Barclays
5 Sep 11
Aquamarine Power 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).
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
"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."
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.