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Scottish state bank floats £30 million loan for Aberdeen Harbour

Scottish National Investment Bank (SNIB) has provided the loan to Aberdeen Harbour
Scottish National Investment Bank (SNIB) has provided the loan to Aberdeen Harbour

Aberdeen Harbour has welcomed a £30 million state-backed loan that will “shape industry” in the north-east for “decades to come”.

The Scottish National Investment Bank (SNIB) has provided the loan to bolster the £350m South Harbour expansion – currently the largest marine infrastructure project in the UK.

The funding comes at a critical time for the harbour following the announcement of the ScotWind leasing round, which is expected to deliver a significant boost to Scotland’s energy and marine sectors.

The expanded port has been designed to accommodate larger, wider, and deeper vessels, while providing land-side facilities which will be able to support the predicted boom in the offshore wind industry.

Offshore wind, decommissioning, cargo and cruise

Bob Sanguinetti, chief executive of Aberdeen Harbour Board (AHB), said the funding will ensure the port is “ideal for space-intense industries such as offshore wind, decommissioning, cargo and cruise”.

Aberdeen Harbour Board (AHB) chief executive Bob Sanguinetti. Photo Kenny Elrick

The money is set to ease some of the cash flow issues the harbour has faced as it has overcome delays and hurdles in its completion.

Mr Sanguinetti had previously issued a plea to Scottish and UK government for financial support “so that we can continue playing that prominent role and leading the way in terms of energy transition in our aspiration to achieve net zero”.

In the energy transition zone

The funding also strengthens the case for the establishment of the controversial Energy Transition Zone (ETZ) project, which is earmarked to be developed over an estimated 30-40 ha alongside the south harbour expansion.

The bank said the South Harbour and ETZ together will create a “critical mass of offshore engineering experience to drive transition and maintain north-east Scotland as a centre of energy excellence”.

St Fittick’s Park next to the South Harbour is a controversial choice for the site of the proposed Energy Transition Zone (ETZ). Photo Kenny Elrick

Eilidh Mactaggart, the chief executive of the SNIB, said the harbour expansion was “strongly aligned with its net zero and place missions”.

The South Harbour project is a critical platform for the just transition in Scotland.

Eilidh Mactaggart, chief executive, Scottish National Investment Bank

She said: “The South Harbour project is a critical platform for the just transition in Scotland, delivering a high-specification facility which will shape industry in Aberdeen for decades to come and provide valuable space, as well as water access, for both offshore wind supply chain providers and offshore wind developers.”

The investment strengthens infrastructure required to ensure the 17 major offshore wind farms planned under ScotWind can be built in time – a report commissioned by Crown Estate Scotland in 2020 warned there was a risk Scotland had “insufficient port capacity” to support the rate of offshore wind development required to meet the UK’s net zero targets.

Scottish ports and ScotWind offshore wind lease areas. Graphic from Crown Estate Scotland/Arup

Mr Sanguinetti confirmed the South Harbour was now just “months away” from opening.

New harbour opening in ‘months’

He added: “The Scottish National Investment Bank has recognised the value and importance of the expanded Aberdeen Harbour as a critical asset in the future of Scotland’s industries, and we would like to thank them for their commitment to the project.

“The port will provide customers and port users with scalable and flexible infrastructure, making it ideal for space-intense industries such as offshore wind, decommissioning, cargo and cruise.

“We are months away from opening our South Harbour expansion and look forward to beginning operational trials in the port at the end of the summer.”

Local MP Stephen Flynn said the investment was “promising” – particularly after the north-east region was snubbed in a £1 billion UK competition to support carbon capture and storage (CCS) schemes.

There was widespread dismay when the Acorn Project near Peterhead lost out in favour of two schemes in the north of England.

“After the ScotWind results a few weeks ago, it was vital that we built on that momentum to capture the jobs that will follow our country’s massive expansion into offshore wind – in that respect, capacity will be central to our ambitions to be at the heart of the renewables industry so this is really promising news,” said Mr Flynn.

“This adds to the £562m delivered by the Scottish Government to support our region’s just transition and with 70% of the ScotWind projects sat just 100 miles off our shore, we have a unique opportunity to be at the epicentre of the renewables industry.

“Meanwhile the UK Government has sat on its hands and snubbed our carbon capture development in favour of English sites all the while syphoning off £350bn from oil and gas – it’s time all governments put Aberdeen at the forefront of investment to allow our region to realise it’s full potential.”

Maggie McGinlay, CEO of the Energy Transition Zone. Photo Scott Baxter

Maggie McGinlay, chief executive of ETZ Ltd, which is leading the development of the controversial energy transition park said the loan funding meant the Scottish Government recognised “the sheer scale of the opportunity before us”.

She said: “Aberdeen South Harbour is  key partner for ETZ Ltd so the additional funding provide by the Scottish National Invested Bank is very welcome and will help accelerate the north-east of Scotland’s ambition to become a globally recognised integrated energy cluster focussed on the delivery of net zero.

“Crown Estate Scotland’s decision to approve developments that will generate 24.8GW of offshore wind power, a significant increase on the anticipated 11GW, is hugely encouraging and it’s great to see the Scottish Government’s recognition of the sheer scale of the opportunity before us.”

Within 100 nautical miles of Aberdeen

She added: “The fact that over 70% of the awarded leases are within 100 nautical miles of Aberdeen means the new deep water, non-tidal harbour will play a major role in ensuring this region capitalises on the massive opportunities that offshore wind and broader energy activities provide.”

A turbine at the Kincardine Floating Offshore Windfarm off Aberdeen. Photo Grupo Cobra Date.

Finance secretary Kate Forbes said the investment from the bank was “extremely significant and welcomed news”.

“This high-quality commercial investment will support the expansion of Aberdeen Harbour and has the potential to underpin Aberdeen and the north-east region’s role in securing a just transition to net zero by 2045,” she said.

“As well as supporting greener energy production, this will also help us deliver the type of harbour infrastructure needed to help us capitalise on the huge economic potential of ScotWind.”

Finance Secretary Kate Forbes

She added: “The Scottish Government is committed to doing all we can to seize Scotland’s economic potential, and the Bank will play a vital role in attracting new investment in our economy and realising our potential.”

The South Harbour project is also funded by the European Investment Bank, Scottish Enterprise, and the Aberdeen City Deal.

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