Investors back UK-France undersea cable, says Ukrainian-born tycoon
Funding to build a £1.4 billion undersea electricity cable between the UK and France has been put together, according to the Ukrainian-born tycoon behind the controversial plans, which are yet again under review by the government.
Last month, the High Court in London overturned a government decision to block the cable, which could supply up to 5 percent of the UK’s energy from the French grid.
Alexander Temerko, a former minister in the Russian government under Boris Yeltsin and former director of the country’s Yukos oil company, told the Financial Times that he had secured a “letter of intent” from a consortium of investors, including banks, for the £1.3 billion construction cost. hedge funds and pension funds.
Those investors, who he declined to name until the project received approval, are also likely to take ownership of the system in the future.
But the plan is still not guaranteed, with local residents and politicians facing fierce opposition to plans for a 2,000 megawatt subsea and underground electricity transmission line between Portsmouth, Hampshire, and Normandy, France. It will be able to transmit 16 million MWh of electricity annually.
Although the government has decided not to appeal the court ruling, it has two months to raise questions about the proposal and a further three months to make a new decision based in part on the Supreme Court ruling.
Temerko, a long-time donor to the Conservative Party, said he had put out a tender for the construction work, meaning the pipeline could be completed as early as 2025 if the government agrees.
Aquind, the mastermind behind the plans, which is jointly owned by Temerko and his partner, Russian-born Viktor Fedotov, has put in place a financing structure that allows the shares to be bought, he said.
Both Temerko and Fedotov are British citizens.
Potential backers “want not only to invest in construction, but also to buy shares,” Temerko said. “We need to raise money in the market. We finalized this process and gave the government a letter of guarantee from the investors.”
No single investor will take more than 25 percent, but larger investors are expected to take ownership from the development team. Consultants for the project include London Bridge Capital, Baringa and FTI Consulting.
London Bridge Capital said it had “contacted potential investors. . . We have received interest in both loan and equity capital that exceeds the project’s financing needs, and investors are expected to take over the development team over time. The results of the engagement were submitted to Ofgem in January.
Temerko said Aquind is also in talks to buy another UK-EU undersea power cable project. He said the UK also needed to build more nuclear power stations to become an energy exporter.
The scheme has been criticized by Portsmouth residents and environmentalists, as well as Tory ministers Penny Mordaunt and Labour’s Stephen Morgan, who have raised concerns about “damages to national security”.
After the Supreme Court’s decision, Morgan said the project would bring “unspeakable disruption to our daily lives and natural environment, with no clear benefits”.