Tuesday, 22 April 2014

Drax Group receives "first of its kind" £80 million purchasing facility http://www.energy-broker.co.uk/drax-group-receives-first-of-its-kind-80-million-purchasing-facility/

North Yorkshire’s Drax Group has completed a £80 million renewable energy receivables purchasing facility with Lloyds Bank to free up cash flow. It is believed to be a “first-of-its-kind” deal on this scale. Electricity generators like Drax earn Renewables Obligation Certificates ROCs for every MWh of renewable electricity produced.Generators sell the certificates to electricity suppliers, such as the vertically integrated UK energy companies, to enable them to meet the requirements of the Government’s Renewables Obligation.However, the payment cycle for ROC sales can be more than 12 months, absorbing working capital for renewable generators.Lloyds Bank Commercial Finance created a ROC receivables purchasing facility that supports cash flow management in the Group’s growing sustainable biomass business.

Wayne Mills, director for Lloyds Bank Commercial Finance who led the transaction, said: “The creation of this ROC monetisation facility was a complex transaction that provides an important cash flow management tool for this major UK power provider.“Nothing like this had ever been done before and we had to ensure we got it right. Whilst the ROC mechanism is a complex scheme, the new facility helps solve what was a significant business challenge for Drax.“Drax owns and operates the largest power station in the UK, and is typically responsible for supplying 7-8% of the UK’s electricity.With carbon abatement central to its strategy, the company wants to transform itself into a predominantly biomass-fuelled power provider through burning sustainable biomass in place of coal and providing the UK with cost effective, low carbon, and reliable renewable power.Michael Scott, head of corporate finance at Drax, said: “We are very pleased to have put this facility in place. It is proving critical to delivering effective cash flow management and we are very grateful to the Lloyds Bank Commercial Finance team for its support.“

via Drax Group receives “first of its kind” £80 million purchasing facility | Bdaily Business News.

Drax Group receives "first of its kind" £80 million purchasing facility

No comments:

Post a Comment