Swansea Council – working in partnership with the Swansea Bay City Region – has decided to press ahead with the Swansea Bay tidal lagoon development rejected by the Government in June this year.

The Welsh Government has indicated that it is prepared to consider “significant co-investment” alongside a private sector institutional partner/investor, subject to appropriate private sector led financial structure and terms being agreed.

The Council is now seeking a partner or partners (corporates or consortia) to help undertake delivery of the £1.5 billion tidal lagoon scheme.

The intention is to build upon the initial designs, but to promote a re-formatting of the lagoon project to enable delivery by a private sector partner and to work with Swansea and the City Region to create a new stand-alone and independently financed multi-asset class development with the lagoon as its centrepiece.

The scheme will involve a strategic review of the overall project, design work; development of business plans; securing of necessary investment, construction and operation.

The project could be structured as a partner development arrangement or through a joint venture. If a joint venture structure is adopted, this could take the form of a contractual joint venture arrangement or involve the creation of a joint venture vehicle.

Swansea is currently considering the most appropriate structure for the project and proposals for the most effective structure are welcomed as part of the market sounding exercise.

The core aspirations for the project include reviewing and evaluating commercial proposals to deliver a re-formatted Lagoon 2.0 project, encompassing any additional elements needed to secure the necessary finance to deliver the initial capital and operational costs to construct, maintain and operate the facility.

Real estate and property development, data centre infrastructure, solar power, manufacturing plants and marine and fisheries could also play a part in the wider development plans for which the Lagoon is a catalyst and energy provider.

The fundamental requirement of the project is to be ‘stand alone’, requiring no form of subsidy.

Key activities the partner or partners will be required to provide include:

• conclude the detailed planning, design and licencing, obtain all appropriate permissions and secure funding for realisation of the Lagoon Development.
• conclude commercial arrangements with funding partners, potential energy customers and other stakeholders to support delivery of the business plan.
• deliver the Lagoon construction, including its infrastructure for energy generation and distribution, managing effectively all project risks.

Swansea Council is now looking for potential partners to come up with proposals for delivery of its core aspirations as part of a market sounding exercise. In particular,it is looking for views on whether its aspirations are achievable and the opportunities presented by the project attractive to the market.

Rob Stewart, Chair of the taskforce and Leader of Swansea Council, commented:

“Despite the UK Government not supporting Tidal Lagoon Power’s proposals, we want to deliver this ground-breaking project in Swansea Bay.

“Unlike the previous proposal, we believe it should be a private sector-led development that doesn’t rely on government or local government subsidy to pay for it.

“That’s why we’re now testing the market to see which companies are interested in helping to deliver the lagoon. This could range from large financial institutions who want to invest in the project to major construction companies who want to build the lagoon.”

The Council is seeking expressions of interest from suitably experienced partner or partners – deadline to submit an expression of interest is 3rd December 2018. Click here to access the Prior Information Notice