A £15m loan facility will help fund replacement of damaged undersea electricity cable.
A £15m loan facility has been provided to Guernsey Electricity to help pay for the replacement of the undersea electricity link between the island and Jersey.
The facility, provided by NatWest International, will help fund the acquiring and commissioning of a replacement cable. The existing cable initially failed in October last year and has had issues since.
The proposed replacement is designed to restore the overall electricity link between Guernsey and France to full power, enabling GE to import low carbon electricity at full capacity once again.
'The replacement cable between the two islands improves the overall security of the electricity supply from France because it removes the section of the cable that has had reliability issues in recent years,' said Julian Turner, chief financial officer of Guernsey Electricity.
'The need to self-generate using heavy fuel oil while the cable has been operating below design capacity is a significantly more expensive option than importing electricity from France.'
He said Guernsey Electricity was impressed by the bank's understanding of their needs and were delighted to work with them on the 10-year lending commitment for the work.
'It was a pleasure and a privilege to work with Guernsey Electricity in order to provide a fit for purpose solution, which benefits not just the company but the island’s infrastructure and resilience as a whole,' said commercial relationship director with NatWest International Lynn Whitworth.
The bank also helped GE to manage the interest rate risk over the same period.
'The skill and speed with which this request was executed is a testament to how closely our deal team and credit function work together and their deep understanding of the local market,' said head of local banking at NatWest International Guernsey Joe Vasey.
The balance of cable financing is to be provided through the proceeds of the States of Guernsey Bond issue.