[ad_1]
Xlinks, which hopes to build a 3,800km cable between Morocco and the UK, is close to completing a funding round that includes commitments from the Middle East and Octopus Energy, Sky News has learned.
An Abu Dhabi-listed energy company is in advanced talks to provide financial backing to Xlinks, a UK-based start-up looking to build the world’s longest undersea cable to help meet the UK’s future energy needs.
Sky News has been told that Taqa, which covers oil and gas, water and carbon capture and storage, is in talks to buy a significant stake in the potential £18bn project.
The deal, which Xlinks is about to finalize as part of a capital raise for development, could be struck within weeks, the sources said.
All told, the UK company expects to raise more than £30 million in new funding in its latest funding round.
Octopus Energy Group, which has become one of the UK’s largest providers of residential gas and electricity, is also believed to be involved.
Xlinks hopes to build a 3,800km cable between Morocco and the UK that could transmit enough electricity to power more than 7 million UK homes.
It will involve a large onshore wind, solar and battery power station in the North African country, dedicated to feeding the UK energy grid.
The project, expected to cost £18bn, received a significant boost last week when the government named it a project of interest in its energy blueprint, Powering Up Britain.
“Vital national interest”
“UK energy security is a vital national interest: however, there is also an urgent need to stick to the government’s 2035 target for a net-zero electricity system and avoid short-term thinking that could undermine the transition to clean, abundant energy,” Xlinks CEO Simon Morrish said last week.
“We welcome the government’s decision to partner with Xlinks to implement our renewable energy projects.
“This is the first Xlinks Morocco-UK power project of its kind and will meet up to 8% of the UK’s electricity demand through renewable energy, reducing consumer bills and increasing security of supply in the process.”
‘Frustratingly slow’ talks with Whitehall
The government’s backing comes five months after former Tesco chief executive Sir Dave Lewis complained about “frustratingly slow” negotiations with Whitehall to back the project.
Xlinks’ ambitious proposal to transport energy from the Sahara Desert to Devon via undersea cables represents a formidable engineering undertaking.
The development funding will drive the technical aspects of the Xlinks work, with the ambition that the link will be operating at full capacity by the end of the decade.
The company has assembled an impressive board that also includes former Rolls-Royce Holdings chairman Sir Ian Davies as a non-executive director.
It will need to move forward with plans to secure the multibillion-pound financing needed to build a massive facility in Morocco, as well as a British factory to make the necessary undersea cables.
“One of the most complex UK energy projects ever undertaken”
Manufacturing sites in Hunterston, Scotland – a nuclear power plant being decommissioned – are secured and under development in Teesside and Port Talbot, Wales.
The cable manufacturing operations will be overseen by XLCC, which will have separate funding arrangements from Xlinks.
Xlinks intends to raise a combination of debt and equity to finance one of the most complex UK energy projects ever undertaken.
The company was founded by Mr. Morrish, who won the Ernst & Young Entrepreneur of the Year Award.
Xlinks believes its £18bn blueprint will be attractive to investors for a number of reasons, not least because it will deliver clean energy at a scale that will make a significant contribution to the UK’s transition to net-zero emissions.
“Low Geopolitical Risk”
Sir Dave has previously said a key factor was Xlinks’ low geopolitical risk, given Britain’s centuries-old trade relationship with Morocco and the North African country’s desire to expand the energy sector’s share of its exports.
The company also said it would be able to deliver energy at £48 per megawatt-hour, lower than the government’s own forecasts, leading to long-term savings for consumers.
It is also much cheaper than nuclear at this level, as the UK will build a new wave of power stations in the coming decades.
Xlinks has not sought direct funding from the government, but is in talks with officials over the predictable price offered by the contract-for-difference mechanism.
Octopus Energy entered into a financial and strategic partnership with Xlinks last year.
A spokesman for Xlinks said the company does not comment on “market rumors or speculation.”
[ad_2]
Source link