The UK Green Investment Bank (GIB) is to provide £100 million to help Drax power station fund its conversion to a mainly biomass-fuelled electricity generator.
The bank will supply an amortising term loan facility of up to £100 million which will complete the capital investment programme to enable the Yorkshire power station to convert three of its six 660 MW coal units and supporting infrastructure to operate on biomass.
The conversion project has the potential to deliver more than ten TWh of renewable electricity per year.
The GIB loan will go alongside the support from Prudential and M&G UK Companies Financing Fund which committed equivalent funding in July. The GIB loan will be made on commercial terms.
Drax also announced a £400 million revolving credit facility maturing in April 2016, replacing the existing £310 million revolving credit facility.
GIB chief executive Shaun Kinsgbury said: “Sustainably sourced biomass is a key form of renewable energy supported by UK government policy and will play an essential role in the UK’s transition to a low carbon economy. This financing not only supports Drax in reducing future greenhouse gas emissions but also accelerates the UK’s transition to a green economy.”
Drax is the largest power station in Western Europe with generating capacity of 3,960 MW and provides approximately seven percent of the UK’s electricity supply.