Bonds fund UK greenfield renewables plant

Author: Danielle Myles | Published: 1 Sep 2014
The heat produced as a byproduct of Speyside’s biomass plant will be sold to the nearby Macallan distillery
The financing of a biomass facility in Scotland has paved the way for greenfield renewable projects to tap the UK capital markets.

The public offering, which will fund the Speyside combined heat and power plant, is the first renewable bond to be guaranteed under the treasury’s Infrastructure UK (IUK) scheme.

While a number of greenfield project bonds have been issued in the UK recently, these have overwhelmingly been privately placed and in traditional sectors which are relatively low risk.

The novelty of a greenfield, renewables project issuing public bonds was made possible by IUK’s comprehensive guarantee. But it could be the first step in expanding the UK capital markets to higher risk projects without a wrap.

"My sense is that there are many private investors out there with more...