Decision details

The Cabinet will be asked to consider and approve the 2019/20 Business Plan for B&D Energy Ltd, the Council-owned energy services company (ESCo).

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 Law and Governance, the Cabinet Member for Finance, Performance and Core Services and the Cabinet Member for Regeneration and Social Housing, to negotiate the final terms and enter into long leases (for 20 years or longer) in respect of the new Energy Centre and energy centre/substations at Abbey and Becontree Leisure Centres, subject to a valuation pursuant to the requirements as to disposals in section 123 of the Local Government Act 1972 and state aid principles being complied with; and

(vii)  Delegate authority to the Director of Law and Governance to execute all of the legal agreements, contracts, loans, shareholder agreement, long leases in respect of the Energy Centre and Becontree and Abbey Leisure Centres and any other documents required for the delivery of the Scheme or the Business Plan on behalf of the Council or B&D Energy Limited as may be applicable.