Decision details

Amendment to Arrangements with Empower* - SEPT20/CAB/31

Decision Maker: Cabinet Member for Finance

Decision status: Recommendations Approved

Is Key decision?: Yes

Is subject to call in?: Yes

Purpose:

The purpose of this report is to: 

·                          Receive an update on the progress of the refinancing of the Council’s loan facility provided to ECS Peterborough 1. 

·                          To authorise the amendment of the current loan facility from a construction loan facility to a long term loan facility. 

 

Decision:

Cabinet considered the report and RESOLVED to:

 

1.      Approve the amendment of the terms of the Strategic Partnership with Empower Community Management LLP. 

2.      Approve the amendment of the financing agreement with ECS Peterborough 1 LLP.  

3.      Delegate to the Acting Corporate Director Resources and Director of Law and Governance the ability to finalise matters 1 and 2 above. 

 

Reasons for the decision:

Due to the unprecedented effects on the financial markets arising from the COVID-19 pandemic, there is an opportunity for the Council to protect its investment in ECSP1 by re-modelling the loan on to a long-term funding basis.  This will then allow the Council to either continue to receive a long term income from its investment and exploit any future benefit deriving from this source of renewable energy and its location on roofs of 7,700 properties while placing itself in a position to sell the loan when market conditions stabilise. 

Alternative options considered:

Take control of the assets 

 

If the Council fails to extend the loan, then on 1 October 2020 the loan repayment will be due in full and if it is not paid, ECSP1 will be placed into default and the Council would be required to exercise its security and take over the assets of the company.  At this point the Council will then have to operate the company which is not considered to be in the Council’s best interests at this time for the following reasons: 

 

1.      The Council does not have experience of operating in this market and would therefore need time to acquire the additional skills and personnel required to operate the ECSP1 business  

2.      It would require considerable additional advice from its legal and financial advisors Pinsent Masons LLP and Deloitte LLP and would need to procure a specialist technical advisor for this process.  

 

Do Nothing 

This is not an option as the current construction loan facility no longer reflects the portfolio position.  The loan must be remodelled to reflect the completion of the construction phase of the project and to start the scheduled repayment of the outstanding loan. 

 

Interests and Nature of Interests Declared:

None.

Background Documents:

Cabinet Report JULY17/CAB/16 

Councillor Member Decision Notice MAR18/CMDN/123 

Councillor Member Decision Notice JUL18/CMDN/01 

Councillor Member Decision Notice OCT18/CMDN/40 

Councillor Member Decision Notice NOV18/CMDN/57 

Councillor Member Decision Notice MAR19/CMDN/98 

Cabinet Report SEP19/CAB/43 

Councillor Member Decision Notice NOV19/CMDN/59 

Councillor Member Decision Notice JAN20/CMDN/75 

 

Publication date: 21/09/2020

Date of decision: 21/09/2020

Decided at meeting: 21/09/2020 - Cabinet

Effective from: 25/09/2020

Accompanying Documents: