The report to Cabinet on 16 June 2021 sought agreement to invest £3.4 million of government funding in the Low Carbon Hub’s Ray Valley Solar Farm which would in turn result in an annual payment to the Council of £177,000 as well as promote community owned energy. The amount was subsequently revised down to £2.055 million, to be fully funded by the Public Sector Decarbonisation Scheme grant awarded to the council by Salix Finance Ltd a wholly owned Government department funded by the Business Energy and Industrial Strategy Department (BEIS) to finance the project costs of a solar farm project at Ray Valley.

The report to Cabinet on 10 November 2021 outlined a further loan investment to be made to Low Carbon Hub to support the Ray Valley Solar project of £2 million.

Two loan agreements, for the amount of £4.055 million, are in the process of being drawn up and associated documentation will include: 

a)    An intercreditor deed which details the terms of the investment and security of money lent to Low Carbon Hub IPS Ltd, by the council in connection with other parties that have an interest in the development i.e Low Carbon Hub IPS Ltd (a parent company of Ray Valley Solar Ltd), Ray Valley Solar Limited, Low Carbon UK Solar Investment Company Ltd and Triodos Bank UK Limited. The Council will be subordinate to all other parties named with the Senior Debt holder being Triodos Bank UK Ltd;

b)    A debentures between the Council and Ray Valley Solar Limited; and

c)    Any other associated agreements

Both loans totalling £4.055 million will have the same terms and conditions and repayments will be on an annuity basis attracting an interest rate of 2.85% for an anticipated 22.5 years. Once agreed a single transaction will see the advancement of £4.055 million to Low Carbon Hub IPS Ltd and the repayment back to the Council by the same organisation of the amount previously advanced to them on 6 August 2021 of £2.3 million with interest. Salix Bank Ltd will at the same time pay grant monies to the Council of £2.055 million in connection with the Councils previously approved grant application to part fund the transaction.

Two decisions are being made:

1)      The decision being made by the Head of Financial Services is to agree the terms of both loans as set out above, and to agree to enter into the second loan in accordance with the delegation of Cabinet on 10 November 2021.

2)      The decision being made by the Head of Corporate Strategy is to agree to enter into the first loan on the terms agreed by the Head of Financial Services in accordance with the delegation of Cabinet on 16 June 2021.