News / Viking project will test trust’s nerve
THE CUSTODIANS of Shetland’s oil wealth will need a “some nerve” if they decide to go ahead and draw up to £72 million to pay for the Viking Energy wind farm.
Shetland Charitable Trust, who control half of the wind project alongside power giant Scottish & Southern Energy, have been told the banking world is keen to invest in the £800 million project.
The trust itself will be expected to raise £72 million, more than one third of its investments which currently stand at £197 million.
Trust finance controller Jeff Goddard told Thursday’s meeting of trustees that there were three options to raise the cash, including raiding the reserves for the full amount, borrowing half of the cash or borrowing it all.
However Mr Goddard explained the cash would be tied up for at least three years and if the trust dipped into its pot of gold to raise all or part of the £72 million it would make it hard to maintain its current £11 million annual expenditure on local sport, leisure, welfare and amenity services.
“Removing money from the charitable trust’s investments would mean a reduction in charitable trust income. It would mean that there would be a period of spending out of our capital rather than our income.
“That will need careful managing and some nerve from the trust if that is going to happen,” Mr Goddard said.
Trustees agreed to draw down a further £750,000 to make up the £3 million cost to the trust of taking the wind farm to the planning stage, probably next year.
Trust chairman Bill Manson, who also chairs Viking Energy Ltd which the trust controls, said: “If I thought this was a bad bet financially I would not be agreeing to recommend to you that you should draw down the remaining £750,000.
“There would be no point in spending more money if I thought it was chucking good money after bad.”
Anti Viking Energy campaigners Sustainable Shetland said that the trust was taking unacceptable risks with the islands’ community funds.
Chairman Billy Fox said the trustees were not being told that this was a high risk investment being made at a time when government funding was facing cuts of 25 per cent over the next few years.
“This is incredibly high risk because it’s in Shetland. It could run into trouble because of a landslide, a change in government policy, interconnector charges and suddenly become worthless.
“It’s being built in an environment where it’s never been done before, where the logistical problems have never been faced before. It’s as if they are going to magic a wind farm into place. They’re throwing good money after bad.”
Meanwhile trustee/councillor Laura Baisley raised the question about whether local people might be able to invest in the project, referring to the enthusiasm shown for investing in the Blackwood whisky distillery several years ago.
That was a question that would have to wait until the project was further down the road, she was told.
The Viking Energy Partnership is due to publish an addendum to their planning application in July after several statutory bodies objected to their original plans in May last year.
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