This financing for JDR Cable Systems Limited, a world leading global subsea cable and umbilical supplier and servicer and part of the Tele-fonika Kable Group (TFK) of Poland, will finance the construction of a new £140m subsea power cable manufacturing and R&D facility in Cambois near Blyth, Northumberland.  This investment will create 170 new skilled jobs and safeguard 270 positions across JDR for local communities and contributes to the rebuilding of the regional manufacturing economy in the North East of England, a region that is emerging as a cluster for renewable energy.  On completion, this will be the only facility in the UK capable of full start-to-finish manufacturing of high voltage subsea cables for offshore wind farms to support the growing global renewable energy market.

SG was appointed as Financial Advisor to optimize the capital structure of the Group, and SG Development and Structured Export finance team has been at the forefront to develop the idea of JDR Ltd being a UK company and a potential exporter eligible under UKEF Export Development Guarantee (“EDG”) and Bond Support Scheme (“BSS”). The eligibility of the company for support from UKEF was driven by the combination of (i) the securing of employment in the UK (ii) the projected high turnover from overseas customers and (iii) the ESG dimension the plant being dedicated to renewables market

HSBC and SG acted as joint coordinator for a GBP 103.7 facility agreement provided under the UK Export Finance EDG programme – split into a GBP 82.96m 100%-UKEF covered tranche, and a GBP 20.74m Commercial Facility. The transaction was signed in April 2022 and closed in October 2022.

Key transaction highlights and “market firsts” are set out below:

• A first EDG with such complex structure: a "Hybrid structure, with elements of typical project financing and real estate financing blended into a corporate structure to achieve credit risk enhancement for the stand-alone financing of the UK company. Prior to this transaction, the EDG product had been deployed primarily to support large plc borrowers on investment grade type terms.  
• Success was achieved thanks to key industry expertise from the banks:  Strong cooperation with SG’s industry experts to take comfort on the company strategy and business plan, which was crucial both for SG’s as well as UKEF’s credit approvals
• An additional support through Bonding Lines: In addition to the EDG, two bonding facilities (one with UKEF cover under the Bond Support Scheme structure and one uncovered) have been signed to support current and future business and secure new export contracts". This involved the use of an innovative intercreditor structure to bring together the different UKEF covered products in one financing (which we understand to be a market first). 
• The project was also supported by a grant from the UK government’s Department for Business, Energy & Industrial Strategy (BEIS) under the Offshore Wind Manufacturing Investment Support (OWMIS) scheme, and the site was provided under a long lease provided by Advance Northumberland, a local government body.