Company behind £1.3bn tidal lagoon scheme strikes debt deal
THE firm behind a £1.3bn tidal lagoon project has agreed a company voluntary agreement (CVA) to resurrect the project and pay off its debts.
The Swansea Bay Tidal Lagoon project was rejected by the UK government in June after ministers refused to pay the subsidy needed to build the world's first tidal power lagoon.
Tidal Lagoon Plc has since lost high-profile backers such as billionaire businessman Sanjeev Gupta, who has turned his attentions to a rival project with Simec Atlantis.
Read more: Government backs plans for £1.3bn Swansea Bay tidal lagoon
The CVA will give the company two years to raise funds for the project before creditors could opt to take action.
Its creditors include the Welsh government, which loaned the company £1.25m in March and an extra £1.25m to subsidiary Tidal Lagoon (Swansea Bay) Plc in February 2015.
A spokesman for the company said: “The CVA approval process has concluded successfully, which means it was approved by shareholders and creditors and we can continue work to deliver Swansea Bay Tidal Lagoon and the wider tidal lagoon programme.
“It is intended that through this work we will be able to settle all creditor claims.”
In June the business and energy secretary Greg Clark threw out the scheme and said the £1.3bn project was not value for money.
He told the House of Commons the government would not be paying the company the fee it wanted for the energy generated.
The company told City PM it had met with stakeholders to shape a new delivery plan that is not reliant on the award of a government contract.
Delivery partners for the project, which could generate electricity for 155,000 homes for the next 120 years, include Atkins, General Electric, Laing O’Rourke and Andritz Hydro.