Here its chief executive, Tim Reid, shares what that support can look like, and how it helped Hive Energy reach new markets overseas.
The renewable energy industry is carving a path forward in the journey against climate change. Of course, renewable technologies play a vital part. The United Nations notes that efficient and reliable renewable technologies reduce vulnerability to market shocks, increasing resilience and energy security by diversifying power supply options. At home, supporting the development of renewable energy infrastructure is central to maintaining the UK’s energy security and reaching the UK’s goal of achieving net zero by 2050.
Helping to fulfil the UK’s renewable energy potential
UK Export Finance (UKEF), a government department supporting UK exporters, plays a significant role in supporting businesses at the forefront of the renewable transition. UKEF’s mission is to ensure no viable UK export fails due to lack of finance – and this means helping businesses to access opportunities that are being created by the move towards net zero.
And due to inherent financing challenges faced in the renewables sector, support for businesses to reach new markets is crucial. Would-be exporters must overcome barriers like the need for significant upfront capital and challenging payment terms. A great story of how these barriers can be overcome, with the right support, is that of Hive Energy.
Hive Energy: Powering a sustainable future
Hive Energy identifies and develops greenfield sites for solar parks and other renewable energy facilities, bringing them to operational profitability before selling them. This strategy allows for continuous reinvestment in new projects, and in recent years, the firm’s scope has grown to also include battery storage and green hydrogen.
They’ve seen great success since launching in 2010, but have at times faced financial strains when looking to expand overseas. Local authorities and power grid operators can ask developers to provide a financial guarantee to prove their ability to pay connection fees when finally bringing their facility online. Since they do not usually operate the facilities which they have developed, there is no ongoing stream of revenue to draw upon – monthly revenue can vary, and the operational model relies on project sales. This can make it harder for them to access the additional finance needed to grow overseas, beyond the crowded domestic market.
UKEF was able to offer its General Export Facility (GEF) product, aiding Hive to secure a £19 million export finance package from Santander. This involves UKEF providing a guarantee to the bank, unlocking finance that was previously difficult or not attainable. This kind of partnership with banks and financial institutions facilitates access to trade finance and frees up working capital to support business growth – and it does not require specific export contracts.
UKEF’s support has helped Hive to export to countries such as Italy, Spain, Turkey, Chile and South Africa. The ability to reach overseas markets presents a vastly increased scope of opportunity for the business, which has delivered 2.8 gigawatts of solar capacity worldwide since its launch and aims to build on this in years to come.
Unleashing growth potential
In the global transition towards renewable energy, we need to provide the financing tools with which businesses can seize new opportunities. As in Hive’s case, that meant trade finance support – but it can also mean financing support for your overseas buyers, or credit insurance.
Whatever the case – if your business is facing similar financing issues but is ready for expansion overseas, it may be time to consider speaking to a UKEF representative to help you get there. UK industry is a leader in the renewables field, and there is real demand for its services as other countries transition towards becoming more sustainable, energy-secure and resilient. We are here and ready to work hand-in-hand so that the UK can capitalise on that and become a global leader in industries of the future.
Image credit: UKEF
