DRAX Power Station has been given Government support for its plans to switch from coal power to biomass.
Operators have agreed a £75 million loan with Friends Life, which will mature in 2018, and is underpinned by a guarantee from the Treasury.
The loan replaces £50 million of the £100 million loan facility agreed with the UK Green Investment Bank, signed in December 2012, and secures Government support to convert three of the station’s generating units from coal to biomass.
Tony Quinlan, finance director of Drax, said: “This further strengthens our balance sheet, as we progress our project to transform the largest coal-fired power station in the UK into an electricity generator fuelled predominantly by sustainable biomass.
“The benefits are multiple, from securing jobs at Drax and across the UK in the supply chain to providing low carbon, cost effective and reliable renewable power for the consumer. We are delighted to secure the support of Friends Life and Infrastructure UK.”
Mark Versey, chief investment officer at Friends Life said: “We are pleased to work together with Drax and HM Treasury and support the Infrastructure UK Guarantee Scheme as an institutional investor.
“This investment demonstrates Friends Life’s ability to explore infrastructure and other alternative investment opportunities to ensure Friends Life remains competitive and nimble in a changing market.”