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The Treasury has offered to guarantee £75 million of debt for Drax Power's conversion from coal to biomass, as part of a programme designed to boost growth.
The signal of support from government will give Drax a boost as it seeks finance to switch half the generators at its coal-fired plant to run on biomass.
The company is issuing debt to support investment of between £200 million and £250 million in the transition this year. It expects to secure the funds by the end of April, at which point the terms of any government guarantee will be confirmed.
It is likely to be the first project to benefit from government infrastructure guarantees. Several other utility projects are in line for similar support, notably EDF’s proposed Hinkley Point C nuclear plant.
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