Scotrenewables Tidal Power Limited has closed a major financing package totalling £8.84 million, which includes £1.24m in public funding from the Scottish Government as well as £7.6m in private investment from a trio of multi-national backers.
The deal will see both of SRTP's long-standing investors, shipping and renewable energy specialists Fred. Olsen and oil major TOTAL, participating in this round along with a new investor partner in ABB Technology Ventures.
ABB-TV is the venture capital arm of the Swiss power and automation multinational and its decision to invest will allow SRTP access to ABB expertise in key technical areas which complement the offerings of SRTP's existing investors.
Under the terms of the £7.6 million investment deal ABB-TV will contribute £5 million while the remaining £2.6 million will come from SRTP's existing investors.
These funds will be injected in two equal tranches the second of which will be linked to the ongoing technical progression of SRTP's proprietary technology. The £1.24 million in funding awarded to SRTP in August 2012 under the Scottish Government WATERS 2 scheme was critical in leveraging the agreed terms for this substantial amount of foreign private investment.
The official announcement on the investment deal was made by Scottish First Minister Alex Salmond during First Minister’s Questions at the Scottish Parliament.
“Scotrenewables' announcement today of the details of their foreign investment package worth £7.6 million is terrific news and a huge vote of confidence in the Scottish offshore renewables industry," the First Minister said.
"This deal brings in a substantial amount of private funding from overseas - more than £6 in foreign investment for every £1 of public money. It is another example of how public money can be used to leverage private investment and help support industry to reach ever-more ambitious heights," Salmond added.
The financing will fund the design, construction, installation and testing of the next generation commercial-scale Scotrenewables Tidal Turbine – rated at 2 MW and known as the SR2000.
This turbine, which is scheduled for completion in Spring 2014, will incorporate learning from successful grid-connected testing of the 250kW prototype currently ongoing at the EMEC Fall of Warness tidal test site and will be optimised for a fully commercial 20-year design life.
The SR2000 will be the first of a number of commercial SRTT units installed in the Lashy Sound tidal demonstrator project in Orkney which was awarded ‘Agreement for Lease’ by the Crown Estate in early November 2012.