Landmark £430m green transition loan for Wood
Robin Watson: ‘unstoppable momentum’ (pic: Terry Murden)
Engineering and consultancy group Wood is the first ever recipient of a UK government-backed green transition loan to seize new clean growth export opportunities.
This £430 million commercial facility will be supported by an 80% UK Export Finance (UKEF) transition export development guarantee.
It will accelerate the Aberdeen-based company’s organic growth in low carbon operations, provide working capital, as well as additional funds for research and development.
With less than three months before the UN climate change conference, COP26 in Glasgow, the UK is focused on aligning its free trade agenda behind green exports to speed up the country’s transition away from fossil fuels to low-carbon energy sources.
The strategy is expected to deliver up to £170 billion of export sales in goods and services for the UK by 2030.
Industrial firms such as Wood will be backed by the UK Government to drive forward this transition.
Wood will commit to increasing its clean growth portfolio and significantly reducing its greenhouse gas emissions over the five-year tenure of the facility.
The company employs about 7,000 people across the UK and generates nearly £400 million annually from exports. It expects its export revenue related to low-carbon projects to significantly increase as the energy transition gathers pace.
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.”
Robin Watson, Wood chief executive, 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.”
UKEF’s transition EDG was launched ahead of COP26 to enable UK exporting companies to access the financial resources they need to transition away from fossil fuels to clean energy alternatives.
The facility was co-ordinated jointly by Citi and BNP Paribas with Citi acting as facility agent while Rothschild & Co acted as adviser to Wood.
The mandated lead arrangers were ABN Amro Bank, BNP Paribas, Citi, HSBC UK Bank, Lloyds Bank and The Royal Bank of Scotland.
Slaughter & May acted as legal counsel to Wood with Allen & Overy engaged jointly by UKEF and the banks. CRISIL, an S&P Global company, acted as an independent consultant and was engaged to assess the credibility of Wood’s clean growth plan and carbon reduction targets.