Engineering and project management giant Wood, of Aberdeen, has secured a UK Government-backed loan worth £430 million to bolster its green credentials.
The cash is the first to be delivered under a new funding scheme, the UK Export Finance (UKEF) “guarantee”, aimed at helping exporters through the energy transition and creating green jobs around Britain.
We recognise the unstoppable momentum behind the energy transition and are committed to providing the practical solutions to help deliver a net-zero future.”
Robin Watson, chief executive, Wood
Wood’s commercial loan is supported by an 80% UKEF Transition Export Development Guarantee (UKEF’s Transition EDG).
The cash injection will allow the company to accelerate the speed at which it can organically grow its business by investing in future low-carbon growth areas linked to the energy transition in the UK and abroad.
It is expected to also provide working capital for deployment in clean growth projects around the world, as well as additional funds for research and development in clean growth sectors.
Under the agreement, Wood is committed to increasing its clean growth portfolio and significantly reducing its greenhouse gas emissions over the five-year term of the loan.
Wood chief executive Robin Watson said, “We recognise the unstoppable momentum behind the energy transition and are committed to providing the practical solutions to help deliver a net-zero future.
“We are already well-advanced with our own transition, deliberately broadening our portfolio across energy and supporting our clients to achieve their own carbon reduction goals.
“UKEF’s support will allow us to accelerate this journey and capitalise on the many opportunities emerging as we build the low-carbon energy systems of the future.”
Big-name banks on board
The loan is co-ordinated jointly by Citi and BNP Paribas, with Citi acting as facility agent, while Rothschild & Co acted as advisers to Wood. Crisil, a subsidiary of ratings company S&P Global, was engaged to assess the credibility of Wood’s clean growth plan and carbon reduction targets.
International Trade Secretary Liz Truss said, “Green trade presents a major economic opportunity for Britain that will drive high-value jobs in every part of the nation.
“Wood has already made great strides in repositioning its business for a low-carbon future. I am delighted it is the first company to energise its clean growth plans using UKEF’s new Transition Export Development Guarantee, which will support thousands of green jobs.”
Scotland Office Minister David Duguid said: “It’s fantastic to see the UK Government’s first green transition loan going to a Scottish-based company, helping support low carbon jobs right across the whole UK.”
Wood employs nearly 7,000 people across the UK and generates nearly £400 million annually from its exports. The company expects its export revenue, related to low-carbon projects, to significantly increase as the energy transition gathers pace and the loan is expected to help it capitalise on these opportunities, supporting green jobs.
What is UKEF?
UKEF is the UK’s export credit agency and a government department, working along-side the Department for International Trade as an integral part of its strategy and operations.
Established in 1919, it exists to ensure that no viable UK export should fail for a lack of finance from the private market. It provides finance and insurance to help exporters win, fulfil and get paid for export contracts.
UKEF’s Transition EDG has been launched ahead of COP26, in Glasgow, to help UK exporting companies access the financial resources they need to transition away from fossil fuels to clean energy alternatives.