The Severn Barrage is still viable and could be funded by private finance, an expert in financing infrastructure schemes told NCE this week.
Credit Agricole CIB managing director and head of project finance for its Global Loan Syndication Group Liam O’Keeffe believes that the project is viable for private funding, countering the government’s view that the private sector would not meet its huge construction costs (NCE 21 October). However, O’Keeffe stressed this was his personal view and not that of his bank.
“It’s a big infrastructure project and we need to understand the values of it,” he said. “The Severn Barrage is a predictable, proven technology, unlike say offshore wind.”
Planning process “biggest problem”
O’Keeffe suggests the biggest problem for the project is the planning process. He believes that with the right planning conditions and finance package the project could become viable.
“You can break the project up into financial packages such as dam construction and energy generation.”
“A project such as the Severn Barrage would require a core equity from the big sponsors, for example EdF or Centrica, of about £4.5bn to £5bn and the rest could be split into packages of about £2bn to £2.5bn.”
The comments come a month after Corlan Hafran was formed by engineering and finance firms to push the scheme forward (NCE 21 October).
Credit Agricole helps arrange finance for public private partnerships (PPP) and has recently been involved in the M25 and Bristol Hospital schemes in the UK.