Hargreaves unveils new venture company to pursue Scottish energy projects
Brockwell Energy Limited has been formed to oversee the development and potential spin-off of the Hargreaves’ energy project interests, which also includes schemes in the onshore wind and flexible gas industries.
The most advanced is the proposed £150 million Earl’s Gate combined heat and power plant at Grangemouth.
The plant received planning permission in January and a memorandum of understanding has now been signed with the Green Investment Bank (GIB) to develop the scheme further.
It is expected Earl’s Gate will reach financial close before the end of this year, at which point GIB is expected to take a 50% equity stake in the project.
The company said “excellent progress” had been made on the scheme, with the plant benefitting from the ability to sell into an existing private heat and power network.
It said Earl’s Gate was expected to be one of the most efficient facilities of its kind in the UK.
“The board expects the Earl’s Gate project to generate significant long-term returns and value,” Hargreaves said in a statement to investors.
“In the short term, the successful financial closure of the project should generate a modest development premium and offer an opportunity for the group to co-invest alongside a highly credible and successful third party investor.”
The second Scottish energy from waste scheme to be taken forward by Brockwell is centred around the former Westfield open cast coal mine in Fife.
The wider redevelopment vision for the complex envisages the installation of a solar energy park and the creation of new industrial units.
Investment at Earl’s Gate and Westfield has the potential to create hundreds of construction jobs and a number of full-time posts once the sites are up and running.
Hargreaves chairman David Morgan said setting up the new subsidiary company was the best way to take forward the group’s energy portfolio.
“Exciting progress continues to be made in developing value in our energy projects,” Mr Morgan said.
“The formation of Brockwell Energy creates an opportunity to raise the specialist capital and create the partnerships necessary to enable the group to extract maximum value across the entire portfolio of energy projects whilst allowing the group to control the level of any investment and to focus on cash generation and the continuing simplification and development of the group.”
The new venture company will be headed by former Welsh Power Group non-executive chairman Alex Lambie, who has been appointed as chief executive officer.
He will be supported by Hargreaves’ chief financial officer Iain Cockburn, who will join Brockwell as CFO on a permanent basis once a successor in his current role has been recruited.
Mr Lambie said the new business had the chance to create significant value as it progressed.
“Since first engaging with Hargreaves to advise on the development of its energy projects, I have been struck by the quality of the project portfolio and the drive and professionalism of the team that has been assembled within the group to develop and manage these projects,” Mr Lambie said.
“Together, the projects and the team offer the opportunity to create significant value from the current project portfolio and provide a strong platform to develop a larger business focused on the development and delivery of energy projects across a balanced portfolio of technologies.
“I am delighted to be tasked with leading the team and excited by the opportunities that lie ahead.”