Bank agrees £15million loan for Guernsey Electricity

Tuesday 27 August 2019

NatWest International has given Guernsey Electricity Limited a £15million loan to help fund the replacement of the undersea electricity cable between Guernsey and Jersey.

The replacement has been proposed following the failure of the existing cable in October last year.

Overall, it aims to restore the electricity link between Guernsey and France, so GEL can once again import low carbon electricity at full capacity.

"The replacement cable between the two islands improves the security of the electricity supply from France because it removes the section of the cable that has had reliability issues in recent years," said Chief Financial Officer for Guernsey Electricity, Julian Turner.

Pictured: Head of Local Banking for NatWest International, Joe Vasey.

"The need to self-generate using heavy fuel oil while the cable has been operating below design capacity is a significantly more expensive option than importing electricity from France. The balance of cable financing is to be provided through the proceeds of the States of Guernsey Bond issue.

"We were impressed with the bank's understand of our needs and were delighted to have been able to work with their team to agree a ten year lending commitment to enable us to progress this vital replacement."

Commercial Relationship Director for NatWest International, Lyn Whitworth, added: "It was a pleasure and a privilege to work with Guernsey Electricity in order to provide a fit-for-purpose solution, which benefits not just the company but the island's infrastructure and resilience as a whole."

The bank also helped GEL manage the interest rate risk over the same period.

"The skill and speed with which this request was executed is a testament to how closely our deal team and credit function work together and their deep understanding of the local market," said Head of Local Banking with NatWest Intonational, Joe Vasey.