The UK Green Investment Bank (GIB) is pleased to confirm that it has supported Drax Group plc (Drax) in the completion of the financing required by the Group to support its transformation into a predominantly biomass-fuelled electricity generator.
As part of a financing package announced by Drax today, GIB will provide an amortising term loan facility of up to £100 million, alongside the Prudential and M&G UK Companies Financing Fund who committed equivalent funding in July 2012. The loan will be made on commercial terms. Drax also today announced a £400 million revolving credit facility maturing in April 2016, replacing the existing £310 million revolving credit facility.
Drax power station is located in North Yorkshire. It is the largest power station in Western Europe with generating capacity of 3,960 MW and provides approximately 7 percent of the UK's electricity supply.
The loan will enable Drax to complete a capital investment programme to convert three of its six 660 MW coal units and supporting infrastructure to operate on biomass. The conversion project has the potential to deliver more than 10 TWh of renewable electricity per year, equivalent to the needs of more than 2 million homes.
Commenting on the financing, Shaun Kingsbury CEO of the UK Green Investment Bank, said:
We are delighted to support Drax in the delivery of its biomass strategy. Sustainably sourced biomass is a key form of renewable energy supported by UK government policy and will play an essential role in the UK's transition to a low carbon economy. This financing not only supports Drax in reducing future greenhouse gas emissions but also accelerates the UK's transition to a green economy.