PKF Francis Clark’s Energy & Infrastructure corporate finance team is delighted to announce that it has successfully advised the shareholders of Eden Geothermal Limited (EGL) on the £16.8 million financing required to drill the first well for their pioneering geothermal heat and power project.
After a ten-year campaign to bring the clean, green technology to Cornwall, the partners said that the £16.8 million in funding will enable them to start drilling on Eden’s site next summer.
Eden Co-founder Sir Tim Smit said today that securing funds and thereby the chance to spark an energy revolution amounts to the biggest leap forward for Eden since it opened in a former clay quarry near St Austell in 2001.
The £16.8 million sum has been secured from a mixture of public and private sources. Cornwall’s final round of EU funding, the European Regional Development Fund (ERDF), has contributed £9.9m. Cornwall Council has put in £1.4m. Institutional investors have contributed the remaining £5.5m.
The EU (ERDF) funding is administered by the UK Government’s Ministry for Housing, Communities and Local Government.
The £16.8 million will pay for the first phase of the project – drilling one well, a research programme and a heat main, to prove the extent of the resource 4.5km down in the granite that lies beneath the Eden site.
This first well will initially supply a district heating system for Eden’s Biomes, offices and greenhouses. It will pave the way for the second phase – another 4.5km well and an electricity plant.
Completing the second phase will mean that Eden will be generating sufficient renewable energy to become carbon positive by 2023 as well as aiming to be able to provide heat and power for the local area.
To deliver the plan, a new company, Eden Geothermal Limited (EGL) has been formed.
As lead financial and commercial advisers for the transaction, Richard Harris and Andy Thornhill from PKF Francis Clark, worked closely with the board and management of EGL to build a robust financial model which was used to approach the market and receive offers of finance from a number of potential private sector funders. As part of an efficient financing process, offers from the leading parties were developed to the point where an institutional investor was ultimately selected as the preferred partner.
Richard Day Chairman of Eden Geothermal Limited commented “We have been delighted with the service from the PKF Francis Clark Renewables team on our geothermal development at the Eden Project. The breadth of their offering is impressive, from financial modelling and advice on grant funding applications as well as helping us to secure institutional funding from a choice of investors. They have been on hand to give valuable and informed perspective on our strategic choices and continue to give us every support.”
Augusta Grand, Director of Eden Geothermal Limited, who has led Eden’s geothermal project for the last seven years, said: “It is great that we’re now getting going on this project. Geothermal has huge potential to provide baseload heat and power on a very small surface footprint. We look forward to being able to demonstrate the advantages of the technology to Eden’s one million visitors a year and encourage greater investment.”
Andy Thornhill at PKF Francis Clark commented “It has been a pleasure to work with the EGL team whose passion, breadth and depth of knowledge has been fantastic. We are delighted to see such an important project move forward and to have helped secure the institutional funding that will hopefully lead to baseload renewable energy from geothermal sources becoming a key part of the UK’s long term de-carbonised energy mix.”