First UK Infrastructure Bank investment goes to green energy hub unlocking thousands of jobs in Teesside
The UK Infrastructure Bank has today confirmed it will invest £107 million in the South Bank Quay development at Teesworks in Teesside (North-East England) supporting c.800 direct jobs.
This is the first investment for the bank, which launched in June 2021 to finance innovative infrastructure projects, tackle climate change and boost growth across the United Kingdom.
The £107 million loan at South Bank will completely transform part of the former Redcar Steelworks site along the River Tees, creating a 450-metre quay to service the offshore wind sector, providing opportunities for manufacturing, storage and mobilisation of wind technology.
The project will significantly boost the UK’s capability in this sector, supporting the Government’s target to be a world leader for offshore wind by 2035 and the UK’s plan to reach net-zero carbon emissions by 2050. The UK Infrastructure Bank deal will support around 800 high quality jobs directly, with the potential to unlock thousands of jobs in total across the site.
South Bank Quay is part of the Teesworks Freeport project, which aims to be the UK’s premier offshore wind hub. It has already attracted global leaders such as GE Renewable Energy, who plan to build a multimillion-pound wind turbine blade manufacturing factory on the site. The quay will play a critical role in the loading out and shipping of these blades to the Dogger Bank wind farm, 80 miles off the coast.
Chancellor Rishi Sunak welcomed the UKIB’s first deal saying:
“It’s great to see the UK Infrastructure Bank is already doing deals and helping deliver on our pledge to level up and reach Net Zero.
“This is a vote of confidence in the Tees Valley economy and our new freeports that will help turbocharge Britain’s post-Brexit growth.”
CEO of the UK Infrastructure Bank, John Flint said:
“I’m very pleased to announce our first transaction, only 4 months since our launch and one that fits with our objectives so clearly. South Bank Quay will not only boost economic activity in the region but is a significant investment in the country’s future green technologies.
“We are looking forward to working with the team and encourage other local and regional bodies to get in touch with us on how we can work together to finance projects across the country.”
Tees Valley Mayor, Ben Houchen said:
“This investment will make the first part of the South Bank quay a reality, which will support GE Renewable Energy’s facility on our site and the thousands of construction and long-term jobs it will create as we drive forward these cleaner, healthier and safer industries.
“It’s also another string to our bow for other businesses looking to locate at the 4.5million sq ft of advanced manufacturing space just next door, which will make us central to the UK’s offshore sector. That this is the bank’s first ever investment is yet another vote of confidence in our region, our innovation and our ability to lead the green and clean technologies of the future.”
The UK Infrastructure Bank opened for business in June 2021 and has an initial £12 billion of capital to deploy as well as £10 billion of government guarantees, which will help to unlock investment in partnership with the private sector and public bodies across the UK.
The bank is engaging with all of the Combined Authorities, the Devolved Administrations and a large number of local bodies across the United Kingdom and expects to make investments across the country.
UK Infrastructure Bank
- The UK Infrastructure Bank was announced as part of the Government’s National Infrastructure Strategy in 2020 and launched in June 2021. A core part of the Bank’s mandate is to lend to local and mayoral authorities for strategic and high value projects. Its objectives are to help tackle climate change and to support regional and local economic growth. More detail is available in the UK Infrastructure Bank Policy Design Document and the Bank’s Framework Document both of which are on our website.
- The Bank is operationally independent from Government - projects are assessed by the Bank, approved through an Investment Committee and signed off by the UK Infrastructure Bank Board. Given the size of this deal and the early stage of the Bank’s development, HMT Ministers performed a role in formally approving the deal put forward by UKIB Board.
- The Bank assessed the investment’s impact in line with its independent processes. The c800 jobs attributable to UK IB finance are expected to contribute on average £53,000 Gross Value Added. The project will enable Teesworks to make a significant contribution to the UK’s 40GW target for offshore wind by 2035. The project will also make a financial return for the Bank, in line with the Bank’s investment principles.
- The UK Infrastructure Bank is facilitating the loan to the Tees Valley Combined Authority, using the Publics Works Loans Board (PWLB). Once a proposal has been assessed and approved by the UKIB, it makes a recommendation to the PWLB to provide a loan to the local authority. The UKIB will then take responsibility for the administration of this loan. Once the UK Infrastructure Bank is placed on a statutory footing it will receive the legal powers to lend direct to local authorities.
South Bank Quay and Teesworks
- Teesworks is an £200million initiative to redevelop the 4,500-acre area to the south of the River Tees, overseen by the Tees Valley Combined Authority. Teesworks is the new name of the former South Tees Development Corporation, the first Mayoral Development Corporation outside of London. Its area covers approximately 4,500 acres of land to the south of the River Tees, in the Borough of Redcar and Cleveland, and includes former SSI steelworks site as well as other industrial assets. The area benefits from river access and includes the deep-water port of Teesport, England’s largest exporting port.
- Tees Valley Combined Authority was created in April 2016. It is a partnership of five authorities; Darlington, Hartlepool, Middlesbrough, Redcar & Cleveland and Stockton-on-Tees, working closely with the business community and other partners to make local decisions to support the growth of the economy.
UK Infrastructure Bank: Miranda Roszkowski, Head of Communications, firstname.lastname@example.org.