19 August 2021
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3 min read
Oil support boats moored near an offshore wind farm in Aberdeen | Credit: iStock
Scottish firm snaps up £430m loan from export credit agency UKEF to boost its clean growth portfolio and reduce its emissions
UK Export Finance has issued its first ever "green transition loan", confirming it has agreed to provide $430m to energy engineering and services firm Wood to grow its low-carbon business over the next five years.
Announcing the news this morning, International Trade Secretary Liz Truss said the financing would enable the Aberdeen-based consultancy to enhance its clean growth exports and grow the number of green jobs across the UK.
Under the terms of the agreement, Wood - which services the energy, oil and gas industries - has committed to increasing its clean growth portfolio and "significantly" reducing its greenhouse gas emissions over the five-year tenure of the facility, UKEF said.
The loan is the first delivered through UKEF's Transition Export Development Guarantee (EDG), a scheme launched by the credit agency in 2020 to help oil and gas companies move towards less polluting operations. It promises to cover 80 per cent of the risk to lenders for a maximum repayment period of five years.
Trade Secretary Liz Truss said she expected UKEF's Transition EDG to support thousands of jobs as companies used the financing to bolster their green credentials.
"Green trade presents a major economic opportunity for Britain that will drive high-value jobs in every part of the nation," she said. "Wood has already made great strides in repositioning its business for a low-carbon future. I am delighted it is the first company to energise its clean growth plans using UKEF's new Transition EDG, which will support thousands of green jobs."
The move comes as the UK government faces increasing pressure to reassess plans for the Cambo oil field development in the North Sea ahead of COP26, after the International Energy Agency warned earlier this year that no new fossil fuel supplies should be developed if the world is to meet its climate goals.
David Duguid, UK Minister for Scotland, said it was "fantastic" the first Transition EDG was going to a Scottish company in the lead up to the vital COP26 climate talks taking place in Glasgow in the autumn. "As we prepare to host COP26 in Glasgow later this year, this announcement marks another important milestone in the UK's energy transition, showing how free trade will help deliver on our net zero targets," he said.
The financing is geared at enabling Wood to invest in low carbon growth areas linked to the energy transitiod and will provide the firm with fresh capital for new clean growth projects and low carbon research and development capacity, according to UKEF.
Wood CEO Robin Watson said the financing would accelerate the firm's ongoing pivot away from oil and gas, noting it was committed to providing the "practical solutions" required for a net zero emission economy.
"We are already well advanced with our own transition, deliberately broadening our portfolio across energy and supporting our clients to achieve their own carbon reduction goals," he said. "UKEF's support will allow us to accelerate this journey and capitalise on the many opportunities emerging as we build the low-carbon energy systems of the future."
The announcement comes after Wood reported a $149m pre-tax loss for 2020 after weaker sales during the pandemic-driven oil price crash last year, in addition to legal costs incurred by legacy bribery and corruption investigations into the company.
