UK Export Finance (UKEF) is backing financing for First Subsea, a Scottish manufacturer of cable protection systems for the offshore wind sector, as it seeks out greater numbers of renewable energy projects.
The export credit agency is providing an 80% guarantee to Virgin Money for bonds required by First Subsea to fulfil existing export contracts.
Owned by Aberdeen-headquartered First Tech Group, First Subsea designs and produces a patented deep-water connection technology, known as ballgrab. The technology has a wide range of uses including in pipe handling, cable protection and drilling.
UKEF says the transaction is intended to support the company’s transition to renewable energy, noting that its cable protection systems “are designed specifically for the challenging environmental conditions associated with offshore wind farms”.
The export credit agency explains that First Subsea has “recently shifted away from fossil fuels to operating almost exclusively in renewables”, with £12mn of export orders for wind farm projects in Europe and Asia Pacific.
Steven Brown, group finance director at First Tech Group, says the support from UKEF and Virgin Money will enable it to “complete vital projects” and “execute far more projects concurrently”.
UKEF, meanwhile, says it is “actively seeking out renewable energy projects overseas, with a huge pipeline identified, and £2bn of direct lending dedicated to financing clean growth projects”.
The agency has previously faced criticism for its support of fossil fuel projects, including a judicial review brought by campaign group Friends of the Earth for its support of a controversial US$20bn LNG project in Mozambique.
But in recent months, UKEF has been working on the introduction of a transition development guarantee scheme geared towards helping oil and gas companies switch to lower-carbon activities.
With the First Subsea deal, UK exports minister Graham Stuart says the agency “is helping us accelerate the transition to clean energy, which will bring prosperity and a wide range of sustainable jobs to Scotland”.
Alastair McMillan, UKEF’s export development manager for Scotland, adds: “First Subsea shows how British companies are increasingly at the vanguard of the global transition to renewable energy and UKEF is here to make sure UK exporters have the financing they need to export.”