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Funding guaranteed for biomass conversion

Power firm Drax has secured Government guarantees on debt to convert the country’s biggest coal power station to wood-chip biomass.

A Drax spokeswoman told Bloomberg the Treasury would underwrite £75m of loans, to be finalised when finance contracts are in place by the end of April.

The debt is set to replace £50m of UK Green Investment Bank loans and supply an additional £25m.

The news will come as a relief to wood recyclers pinning hopes for new markets on the development of biomass.

Bloomberg said Drax could become the first company to use a £40bn infrastructure loan-guarantee programme announced by the Treasury last July.

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