News / Trust sets out Viking windfall
SHETLAND Charitable Trust stands to earn £23 million a year from the proposed Viking Energy wind farm in return for a total investment of less than three times that amount, according to its financial controller.
Jeff Goddard has informed the 23 trustees that the organisation, set up in the 1970s to administer funds flowing into the isles from the oil industry, will need to raise less than £62 million to underwrite the £685 million project.
In a briefing note published shortly after Viking revealed its latest plans, which have reduced the wind farm to 127 turbines generating 485 megawatts, Mr Goddard said that the trust would normally be happy with an income of £5 million a year on such an investment.
He explained that the project will easily be able to raise 80 per cent of its costs from the financial sector, a total of £548 million.
Banks, he said, no longer regard onshore wind farms as risky investments and were therefore happy to sink their money into such ventures.
He quoted the head of energy structured finance at the Royal Bank of Scotland who said: “Most banks who are active in this area do not now see renewables as a hugely risky sector. The mainstream technologies are well-established and people will bank them. There is a track record of these things working pretty well.”
As a result the trust and its Viking Energy partners Scottish and Southern Energy will only be expected to raise £137 million between them.
The trust owns 90 per cent of its half share in the partnership, so it will only need to come up with £62 million, the other £6.5 million coming from the directors of Burradale Wind Farm, who own the rest of the shares.
Mr Goddard suggests the trust dip into its reserves of £220 million for half of the sum they need, and borrow the other £31 million.
“The income projected for the trust from the project averages out at £23 million pa, and will quickly rebuild the trust’s balance sheet and put trustees in the position to be able to decide what to do with the extra income in the best interests of the inhabitants of Shetland. No other investment offers anything like this level of return,” he said.
The Viking Energy project’s latest plans are out for consultation until 19 November and both supporters and objectors to the project are being urged to send their views to the Scottish government’s energy consents unit at EnergyConsents@scotland.gsi.gov.uk
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