Issue - meetings

Appendix 1 to the report (pages 147 – 198) is an exempt document.

The Cabinet Member for Regeneration and Social Housing introduced the 2019/20 Business Plan for B&D Energy, the Council’s Energy Services Company (ESCo).

The inaugural B&D Energy Business Plan was approved by the Cabinet in June 2016 and had overseen the successful delivery of the Becontree District Heating Network, which provided energy to the existing Leisure Centre, the new 50-metre swimming pool and to 170 residential units.  The key focus of the 2019/20 Business Plan related to the continued development of District Energy Networks, specifically in the Barking Town Centre area, and Energy Performance Contracting. 

The Barking Town Centre project would deliver supplies of low carbon heat to approximately 8,000 homes and 60,000m2 of commercial floor area and had already been identified by the Greater London Authority as ‘Strategically Significant’.  The capital cost of developing the network had been estimated at £31.5m and the Cabinet Member confirmed that while the Council would fund the vast majority, via a commercial loan to B&D Energy, the viability of the scheme was entirely dependent on receiving at least £5m grant funding from the Government.

The Business Plan also set out proposed changes to the management and operational structure of the company, as well as steps to strengthen and clarify the governance and accountability arrangements underpinning the relationship between the Council and B&D Energy.

Cabinet Members spoke in support of the latest initiatives aimed at providing low cost, low carbon heat and power to the local community as part of the Council’s drive to reduce energy poverty and promote Barking and Dagenham as the “Green Capital of the Capital”.

The Cabinet resolved to:

(i)  Approve the B&D Energy Limited Business Plan for 2019/20, as set out at Appendix 1 to the report;

(ii)  Approve the creation of a Strategically Significant District Energy Network across Barking Town Centre (“the Scheme”), subject to the receipt of grant funding from the Department of Business Energy and Industrial Strategy (BEIS) Heat Network Investment Project (HNIP) and as generally set out in the Business Plan;

(iii)  Agree the submission of an application to the BEIS for HNIP grant funding in the sum of £5m;

(iv)  Agree, subject to the receipt of HNIP grant, to the Council borrowing £27.2m (including £1.7m approved via the 2016 Business Plan) and on-lend to B&D Energy on state aid compliant terms to fund the balance of the project capital costs of the Scheme;

(v)  Delegate authority to the Director of Inclusive Growth, in consultation with the Finance Director, the Director of Law and Governance, the Cabinet Member for Finance, Performance and Core Services and the Cabinet Member for Regeneration and Social Housing, to negotiate terms and agree the corporate loan(s), shareholder agreement, and all associated contract documents in a manner compliant with state aid rules to fully implement and effect the Scheme and the Business Plan;

(vi)  Delegate authority to the Director of Inclusive Growth, in consultation with the Finance Director, the Director of  ...  view the full minutes text for item 104