Notice

Category B project supported: JDR Cables EDG, UK

Published 2 November 2022

1. Project description

UK Export Finance (UKEF) has agreed to provide support to JDR Cables Limited, which together with a larger Polish group TELE-FONIKA Kable S.A. forms TFK Group, in respect of working capital that will be applied to a specific UK based expansion development in Northumberland. The main contractor who will deliver the construction works for the development of the Project is Galliford Try Construction Limited.

The Project comprises the construction of a new advanced manufacturing and technology facility (53,100m2 gross external floor area) to provide competition and security of cable supply capacity for vital UK energy infrastructure projects, including manufacturing of high voltage subsea cables for offshore wind farms to support the renewable energy market both in the UK and worldwide. The Project will be located north of Port of Blyth, Northumberland, England and adjacent to the northern part of the Blyth Estuary, in the Blyth Estuary Renewable Energy Zone.

The Project does not include any Associated Facilities.

HSBC and Société Generale are the lending banks.

2. Project sector

The Project is in the civil construction sector.

3. Project sponsors

The Project is being developed by JDR Cables Limited.

4. UK exporters

Galliford Try Construction Limited will be the principle contractor for the Project.

5. Export Credit Agent Bank

HSBC

6. Amount of UK Export Finance support

The Export Development Guarantee (EDG) amount is £103.8 million.

7. OECD common approaches and equator principles

The EDG product does not fall under the scope of the 2012 (Revised 2016) OECD Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence (the “OECD Common Approaches”). However, since 100% of UKEF financing will be used to develop a new facility, the Project falls under the scope of the Equator Principles (2020). Accordingly, UKEF categorised the Project as a Category B, i.e. having environmental, social and human rights (ESHR) impacts that are few in number, site-specific, few (if any) of which are irreversible, and for which mitigation measures are more readily available) in accordance with the definition in the IFC Performance Standards.

8. Environmental, social and human right standards

Project related ESHR documentation was reviewed for alignment against the 2012 International Finance Corporation (IFC) Performance Standards (PS) on Environmental and Social Sustainability and the World Bank Group Environmental, Health and Safety (EHS) Guidelines.

The applicable IFC PS were:

• PS1: Assessment and Management of Environmental and Social Risks and Impacts;
• PS2: Labour and Working Conditions;
• PS3: Resource Efficiency and Pollution Prevention;
• PS4: Community Health, Safety and Security;
• PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources; and
• PS8: Cultural Heritage.

The applicable World Bank Group EHS Guidelines were:

• General EHS Guidelines (2007); and
• EHS Guidelines for Metal, Plastic, and Rubber Products Manufacturing (2007).

9. Nature of ESHR impacts

The review of potential ESHR risks and impacts took into account the following impacts, receptors and issues during the construction and operational phases of the Project:

• Climate change;
• Worker welfare;
• Occupational health and safety;
• Management of third-party contractors and suppliers;
• Grievance mechanisms;
• Noise, vibrations, dust and air emissions;
• Hazardous materials, waste and drainage management;
• Water and energy resources;
• Community engagement;
• Community health, safety and security;
• Emergency planning and response;
• Traffic management;
• Biodiversity; and
• Cultural heritage.

10. Assessment of ESHR impacts

A review was undertaken in line with the requirements of the Equator Principles to identify potential ESHR risks and impacts of the Project and how these would be effectively managed.

The review included:

• Desk-based review of Project-related documentation, including UK Planning Application environmental and social assessment documentation and submissions, Environmental and Social Management Plan, and Stakeholder Engagement Plan; and
• Follow-up interviews with relevant Project representatives.

The results of this review formed the basis for the evaluation of the Project’s alignment with relevant international standards, and recommendations for future compliance and monitoring.

11. Climate change considerations

UKEF considered the Project’s potential direct and indirect greenhouse gas (GHG) emissions and effects of climate change factors on the Project as part of its ESHR review.

Based on the estimates provided by JDR, the Greenhouse Gas (GHG) emissions for the Project during operations are not expected to exceed the 25,000 tonnes CO2 equivalent per annum threshold set out in IFC PS3 for Scope 1 and Scope 2 emissions. During operations diesel powered generators will only serve as a back-up. Estimated Scope 3 emissions related to the Project were not provided. It is expected that the presence of a new manufacturing facility will result in additional journeys to and from the area, and therefore associated Scope 3 emissions, however these are not anticipated to be significant.

The ESHR review revealed that the Project design has considered potential physical impacts of climate change such as floods.

12. Decision

Various actions have been agreed between the Project developers, operators, and parties involved in the financing, which are necessary to ensure the Project’s on-going alignment with international standards. Following agreement of these commitments, it was concluded that the Project should meet the relevant international standards over the Project cycle. UKEF has therefore decided to provide its support in respect of the supply of capital goods and services by UK exporters to the Project.

A condition of support is that the Project will be subject to environmental and social monitoring and reporting, to provide satisfaction that the Project is aligned with the relevant international standards throughout the duration of support.

UK Export Finance

October 2022