The Government has launched a new financing guarantee scheme for UK infrastructure, and recycling and waste projects will be able to take advantage of the scheme.
Applications have opened today for the UK Guarantees scheme that aims to kick start critical infrastructure projects that may have stalled because of adverse credit conditions.
Up to £40 billion worth of projects that are ready or nearly ready could qualify, and subject to legislation, the first guarantees are expected to be awarded in the autumn.
Applications need to be made from today in Infrastructure UK, the HM treasury body focused on prioritising and enabling investment in UK infrastructure. For applications that are accepted, the Government will underwrite finance for projects, but will not necessarily provide funding itself.
A spokesman for the Treasury told SCM that no sectors are being ruled out and that projects will need to meet the eligibility criteria of the scheme and be assessed by the commercial process involved before potentially receiving the guarantee. He added that this would include recycling and waste projects, as this sector is listed in the National Infrastructure Plan 2011 on which the scheme is based.
Chief Secretary to the Treasury Danny Alexander said: “The measures we’re announcing today will help work get started on many important infrastructure projects…providing lasting benefits for thousands of people and a significant boost to the economy.”
Eligible projects will be subject to charges, due diligence and as a minimum must meet five criteria. These are:
- Nationally significant, as identified in the Government’s National Infrastructure Plan 2011. The Government will also consider other exceptional projects of national or economic significance on a case-by-case basis, such as university infrastructure
- Ready to start construction within 12 months from a guarantee being given and having obtained (or about to obtain) necessary planning and other required consents
- Financially credible, with equity finance committed and project sponsors willing to accept appropriate restructuring of the project to limit any risk to the taxpayer
- Dependent on a guarantee to proceed and not otherwise financeable within a reasonable timeframe and
- Good value to the taxpayer, assessed by HM Treasury to have acceptable credit quality, not present unacceptable fiscal or economic risks and to make a positive impact on economic growth.
The Government is also providing a £5 billion exports refinancing facility to provide long-term loans for overseas buyers of UK exports at competitive rates by guaranteeing a series of short-term bank loans.