New financing arrangements for Gas to the West to save consumers £50 million

03 August 2018

Following a competitive licence application process in 2014, a licence was granted to WTL (West Transmission Limited) in February 2015 to convey gas to the west of Northern Ireland (Gas to the West). A key part of the licence application bid was the proposal for WTL to obtain finance by raising a bond for the investment once the network is fully operational.

Given the historically low cost of debt for corporate bonds, WTL approached the Utility Regulator to explore the potential to raise the bond for the investment in a timely manner, whilst construction of the network is still ongoing, rather than (as originally intended) waiting until construction is complete. 

With the agreement of the Utility Regulator to assess the viability of securing lower financing costs, WTL approached financiers. The financing deal secured by WTL means that the cost of debt repayments will be around 35% less than they were expected to be when WTL won the Gas to the West tender in 2014.  This amounts to an additional saving of about £50m in present value terms over and above the customer savings already expected from the bidding process.

A number of regulatory arrangements have been put in place to facilitate the financing transaction. These are further described in our Regulatory Arrangements and Decision Paper with associated Annexes: