A flagship renewable energy project in Scotland has won a big boost after the company behind it linked up with billionaire Sanjeev Gupta who has been ramping up his interests in the country through acquisitions.
Plans for a dramatic expansion of the Meygen tidal energy scheme in the Pentland Firth were thrown into doubt in September when the UK Government snubbed a request for support from the developer of the project, Atlantis Resources.
However, Edinburgh-based Atlantis has won a big vote of confidence in the project from Mr Gupta. He plans to work with the firm to develop a global leader in the renewable energy business run from the city.
Aim-listed Atlantis has struck a deal under which the Gupta family’s SIMEC Energy will acquire a 49.99 per cent stake in the marine energy specialist.
Atlantis will take over the Uskmouth power station in South Wales, which SIMEC plans to convert into a renewable energy plant.
The proposed deal forms part of Mr Gupta’s plan to revolutionise the metals industry by using renewable energy to power facilities like smelters and rolling mills.
Last week the Guptas’ GFG alliance agreed to buy Perth-based hydro business Green Highland Renewables in what is thought to have been a multi-million pound deal.
Their Liberty House metals business bought Rio Tinto’s Fort William aluminium smelter in a £330 million deal last December. In April last year it took over the Clydebridge and Dalzell steel mills six months after conglomerate Tata Steel said it was mothballing the sites.
Tim Cornelius, chief executive of Atlantis Resources, said the deal with SIMEC would set the firm up to grow rapidly into a powerhouse in the global renewable energy business.
“It gives us credibility and clout; it gives us scale and significantly increased visibility, access to a balance sheet and internal funding,” said Mr Cornelius.
Atlantis has won support to install eight turbines at Meygen, with four already connected to the grid. It hopes to win backing to add a further 49 turbines at Meygen, and is working on earlier stage projects in Scotland and other countries.
Noting that Atlantis may be able to access the resources of GFG companies to help cuts the cost of developing Meygen, Mr Cornelius said the deal provided a resounding endorsement of the project.
“That was the reason we first had discussions. They were very interested in investing in Meygen,” he said.
Atlantis is ready to start work on the Meygen extension but will not go ahead without securing Government support. This could be provided under the Contract for Difference scheme.
While Meygen missed out in September, Mr Cornelius is confident the Government is warming to tidal energy. “I am hopeful we will hear a good decision some time soon,” he said.
Atlantis has noted the costs of tidal schemes are falling. It has said Meygen could create 5,300 jobs and help put Scotland at the forefront of a major global industry for decades.
Mr Gupta said: “I am delighted to welcome Atlantis to the GFG Alliance with its highly-skilled team and ambitious projects … the potential for this business to create enormous value in the renewable energy market in the near term is tangible and very exciting.”
Atlantis employs 65 people in Edinburgh. It said the deal was anticipated to be the first of a number of renewable energy acquisitions from GFG .
The deal would be a reverse takeover of Atlantis, conditional on its shareholders’ approval.
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