Investors are backing submarine cables between Britain and France, says the Ukrainian-born tycoon
Funding has been provided to build a £1.4billion undersea power cable between the UK and France, according to the Ukrainian-born tycoon behind controversial plans under renewed government scrutiny.
Last month the High Court in London overturned a government decision to block the cable that could supply up to 5 per cent of Britain’s energy from the French grid.
Alexander Temerko, a former Russian government minister under Boris Yeltsin and a former director of Russia’s oil company Yukos, told the Financial Times he had received “letters of intent” for the £1.3 billion construction cost from a consortium of investors including banks. hedge funds and pension funds.
Those investors, whom he refused to identify until the project was approved, would likely continue to take ownership of the project in the future.
However, there is still no guarantee that the project will go ahead as both local residents and politicians have solicited fierce opposition to plans to build the 2,000-megawatt subsea and underground power transmission link between Portsmouth in Hampshire and Normandy in France. It will have the capacity to transmit up to 16 million MWh of electricity per year.
Although the government has decided not to appeal the court ruling, it has two months to ask questions about the proposal and then another three months to make a new decision based in part on the High Court ruling.
Temerko, a longtime Conservative Party donor, said he has also been bidding for the construction work, which would mean the pipeline could be ready as early as 2025 if the government gives its approval.
Aquind, the developer behind the plans, which are co-owned by Temerko and his partner, Russian-born Viktor Fedotov, has created a financing structure to allow for the purchase of shares, he said.
Both Temerko and Fedotov are now British citizens.
Potential financiers “do not want to just invest in construction, they want to buy shares,” Temerko said. “We have to raise money in the market. We have completed this process and given the government a letter of guarantee from investors.”
No single investor will take more than 25 percent, but major investors are expected to take ownership of the development team. Advisors to the project include London Bridge Capital, Baringa and FTI Consulting.
London Bridge Capital said it has “been in touch with potential investors. . . We have received expressions of interest in excess of the project’s funding needs for both debt and equity, with investors expected to take over the development team in due course. The results of this engagement were presented to Ofgem in January.”
Temerko said Aquind was also in talks to acquire another UK-EU subsea power cable project. He said Britain also needs to build more nuclear power plants to become an energy exporter.
The scheme has drawn criticism from Portsmouth residents and environmentalists, as well as from Tory Secretary Penny Mordaunt and Labor’s Stephen Morgan, who raised concerns about “damage to national security”.
Following the High Court’s decision, Morgan said the project would “bring unspeakable disruption to our daily lives and natural environment, with no clear benefits”.
https://www.ft.com/content/1436501c-0bfd-404a-b71f-d8325bd319b0 Investors are backing submarine cables between Britain and France, says the Ukrainian-born tycoon