GOOD NEWS the contract for turbine construction is now signed and the delivery date is November.
We have been unable to give you definite news on the Drumlin turbines for some time due to the ongoing negotiations. Although the contract for the first three sites was finalised some weeks ago, the difficulty has been in agreeing the terms of the letter of credit, which the suppliers require to be in place before proceeding with the contract. For those of you unfamiliar with the term, the letter of credit provides certainty of payment for the suppliers of the turbines and balance of plant works, as long as particular documents are produced to Drumlin’s bank, the Co-op Bank.
The problems experienced make it clear that the fallout from the banking crisis is still with us.
Drumlin is entering into a turnkey contract (i.e. a contract to deliver the turbines and construct them on site). The contractor, WEP, is engaging with the turbine manufacturer for delivery of the turbines and with other parties for the delivery of the balance of plant works. The letter of credit therefore involves the three main parties, and their three banks. All six parties have to agree to the terms of the letter of credit.
We began work on this letter of credit in January, and the terms have only now been agreed. In the process, one of the parties had to change banks because their existing bankers were not acceptable to another of the parties; Drumlin itself has run into some difficulties because of recent announcements by the Co-op Bank (all now resolved); and having been all round the houses to get to some form of agreement, we are more or less back to where we started in the negotiations.
We propose now to add on the fourth site probably as an addendum to the existing contract, subject to the same terms and conditions, and will also proceed to a second letter of credit for the fourth site, as quickly as possible. Our application for the loan from UCIT is going through their process and we need to have confirmation that these funds will be available to us before pressing the button.
In the meantime, we have been getting on with the preparatory balance of plant works, making good use of carrying out ground works during the summer months, in order to achieve the earliest start date for generation; some photos are attached of the work done to date.
The Drumlin share offer is now closed.
We shall provide further updates as we progress construction.