Oilfield services company Wood has been awarded a first-ever government-backed green transition loan by UK Export Finance worth $586 million to seize new clean growth export opportunities.
Wood is the first company to access the Transition Export Development Guarantee ( Transition EDG ), a new facility set up to support UK exporting companies with working capital to invest in low-carbon growth markets including renewables, hydrogen, and decarbonization.
This £430 million ($586 million) commercial loan will be supported by an 80 per cent UKEF Transition EDG and will give Wood the financial resources to enhance its clean growth plans by accelerating the speed at which the company can organically grow its business by investing in future low carbon growth areas linked to the energy transition in the UK and abroad.
This will also help the oilfield services provider by providing critical working capital for deployment in clean growth projects around the world and funds for Wood’s research and development in clean growth sectors.
Under the agreement, Wood will commit to increasing its clean growth portfolio and significantly reducing its greenhouse gas emissions over the five-year tenure of the facility.
International Trade Secretary Liz Truss said: “ Green trade presents a major economic opportunity for Britain that will drive high-value jobs in every part of the nation. 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 Export Development Guarantee, which will support thousands of green jobs ”.
UK Government Minister for Scotland David Duguid said: “ It’s fantastic to see the UK government’s first Transition EDG going to a Scottish-based company, helping support low carbon jobs right across the whole UK.
“ 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 ”.
The facility was coordinated jointly by Citi and BNP Paribas with Citi acting as Facility Agent while Rothschild & Co acted as advisers to Wood. The mandated lead arrangers were ABN Amro Bank, BNP Paribas, Citi, HSBC UK Bank, Lloyds Bank and The Royal Bank of Scotland.
It is worth noting that UKEF’s Transition EDG was launched ahead of COP26 to enable UK exporting companies to access the financial resources they need to transition away from fossil fuels to clean energy alternatives.
Robin Watson , chief executive at Wood, said: “ We recognise the unstoppable momentum behind the energy transition and are committed to providing the practical solutions to help deliver a net-zero future. 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.
“ 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 ”.
Wood employs nearly 7,000 people across the UK and generates nearly £400 million ($545 million) annually from its exports. The company expects its export revenue, related to low-carbon projects, to significantly increase. For example, in the mid-term, Wood believes that just the CCUS market will hold $500 million in potential projects .
UKEF also stated that the UK is expected to deliver up to £170 billion of export sales in goods and services in the low-carbon energy market by 2030.