Chancellor announces UK Guarantees Scheme
UK Guarantees Scheme announced to avoid delays to investment in UK infrastructure projects that may have stalled because of adverse credit conditions.
皇冠体育app Chancellor of the Exchequer and the Chief Secretary announced the UK Guarantees Scheme today (18 July 2012).
皇冠体育app scheme has been introduced to avoid delays to investment in UK infrastructure projects that may have stalled because of adverse credit conditions. It works by providing a sovereign-backed guarantee to help projects access finance.
皇冠体育app government must guarantee a financial obligation, but there is wide discretion over how a guarantee is structured in terms of scale, timing, risk exposure and relationship, subject to the needs and dynamics of each individual project. Guarantees are provided on a commercial basis, with pricing depending on the risk and structure of a particular project. Guarantees for up to 拢40 billion in aggregate can be offered.
Projects must fall within the definition of infrastructure as set out by the .
Project sponsors are encouraged to approach Infrastructure UK to have a commercially confidential discussion about how a guarantee might be able to help raise finance for their project.
Please email [email protected] to arrange a discussion.
皇冠体育app first formal step is for projects to be considered eligible for support, or 鈥榩requalified鈥�. 皇冠体育app financial credibility, stage of development, need for a guarantee, significance and value for money for the taxpayer of the project will all be considerations at this stage. Once a project has been deemed prequalified, the sponsor and IUK will enter into due diligence discussions that are standard for lenders. Projects will then be put through an internal HMT Risk Committee before being submitted to the Chancellor for approval.
皇冠体育app legislation that underpins the scheme received Royal Assent on 31 October 2012.
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