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Shanks lauds GIB for support of Wakefield PFI project

A Shanks’ director praised the support given by the Green Investment Bank when other investers were unwilling.

The GIB provided £30.4m of senior debt funding for a 25-year £750m PFI project that Shanks signed with Wakefield council in January. The investment enables a residual waste treatment facility to be built in South Kirby, West Yorkshire.

Speaking at the bank’s first annual review conference, Shanks UK’s finance director Jerry Simpson described the bank as “practical and pragmatic” and recalled how it stepped in to support the Wakefield project after two commercial banks had pulled out.

The bank - which he called a ‘bank of last resort’ - also helped in mediating with the council when the project experienced delays, added Simpson.

Alongside the GIB, three international banks - Barclays, BayernLB, Sumitomo Mitsui Banking Corporation - provided a total of £121.7m for the project.

“The GIB can enable others [funders] to come in and stay in,” said Simpson. “We had an international range of commercial banks, what really helped in the credit assessment was that the UK Green Investment Bank was in.”

Simpson also urged an expansion of financial instruments available for the bank, in particular that the bank started using financial swaps, which are contractual agreements between two parties to exchange future cash flows specifically tailored to the needs of both parties.

This would mean overcoming some obstacles that currently hinder the financing of more waste and recycling projects, he said.

 

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