To update the committee on the current status of the energy from waste loan arrangement to enable the committee to fulfil its delegated functions.

The Director of Finance (DOF) introduced the report the purpose of which was to update the committee on the status of the energy from waste loan arrangement to enable the committee to fulfil its delegated functions.  The principal points included:

·       The loan balance as at the end of October was 28.5 million.

·       It was explained to the committee that financial covenants look at the position and performance of the borrower and provide assurance over the risk of their ability to meet future debt repayments. It was confirmed no ratios are forecast to be below the agreed compliance.

·       The ownership of Mercia Waste Management had changed In June 2024, but after legal advice and an independent review being undertaken by KPMG, it was noted that there were no changes required to the risk assessment.

·       Committee can be assured that external audit review as part of their usual audit testing, and that a clean audit report had been received.

In response to committee questions, it was noted:

1.     The DOF confirmed the environmental impact section noted within the report was in respect of the environmental impact of the loan repayment.

2.     A written response would be obtained and provided on the installation of carbon caption equipment.

3.     The DOF explained that the loan repayments that are shown in the report are for the term of the loan and that there would be a large payment for the outstanding balance in full due at the end in line with the legal loan agreement.

RESOLVED:

That: a) The committee found the risks to the council, as joint lender, are considered reasonable and appropriate having regard to the risks typically assumed by long term senior funders to waste projects in the United Kingdom and best banking practice; and

b) reviewed the arrangements for the administration of the loan and were confirmed as satisfactory.

Action(s)

2023/24-048 A written response would be obtained and provided on the installation of carbon caption equipment.