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Tidal Lagoon Power, the company behind the Swansea Bay tidal lagoon project, has struck a deal with creditors to help pay off its debts.
A “Tidal Lagoon Taskforce” has convened in Wales to enable local and national authorities, as well as community and business leaders, to consider the full suite of options for financing and delivering Swansea Bay tidal lagoon independent to Westminster.
In June it was revealed the government would not back plans for the Welsh city’s pioneering tidal lagoon power plant, putting the future of the project into serious doubt. The government said its decision was based on figures showing that nuclear and offshore wind can generate the same amount of electricity at a third of the cost.
The company instead entered into a Company Voluntary Agreement (CVA) which allows it to repay some of the debt over time.
Earlier this week Tidal Lagoon Power announced the CVA approval process had “concluded successfully” and the project was still set to go ahead.
A spokesperson for the company said: “The CVA approval process has concluded successfully – which means it was approved by shareholders and creditors and we can continue work to deliver Swansea Bay tidal lagoon and the wider tidal lagoon programme. It is intended that through this work we will be able to settle all creditor claims.
“Throughout the summer we met with a wide range of stakeholders who share our determination to shape a new delivery plan for Swansea Bay tidal lagoon that is not reliant upon the award of a CfD [contract for difference] from central government.”
In March this year Welsh ministers provided a £1.25 million loan to Tidal Lagoon Plc for working capital requirements including the development costs of the Swansea Bay and Cardiff tidal lagoons.
The Welsh government added it continues to be “open to consider ideas to find an alternative way to fund a Swansea lagoon” but that it is too early to say whether this loan, or elements of it, can be recovered at this stage.
Ministers also provided a £1.25 million loan to separate company, Tidal Lagoon (Swansea Bay) Plc, in February 2015 to support the development costs of the Swansea Bay project.
This company is still active and is not subject to a CVA.
A Welsh government spokesperson said: “We have been clear and consistent in our support for the Swansea Bay tidal lagoon and were committed to doing all we could to make the pathfinding project a reality.
“Sadly, despite the supportive recommendations of the Hendry review of the lagoon, the UK government failed to back the potentially transformational project.”
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