£180m tax boost for Drax power station biomass conversions
Chris Hodrien
12/4/11 - £180m tax boost for Drax power station biomass conversions
from the co2sense Business Desk
POWER station Drax has received a £180m cash boost after reaching a deal over tax issues with HM Revenue and Customs.
The agreement relates to the company's Eurobond debt structure put in place to buy the company in 1999 and a number of other tax matters.
It will allow Drax to unlock money previously 'ring-fenced' for dealing with the matter, and the company has earmarked it for investment into its drive to increase the use of biomass in electricity generation.
Finance director Tony Quinlan said: "We are delighted to have brought these
complex matters to a conclusion. We would like to thank HMRC for their
professionalism and commitment which has allowed an efficient resolution to this
process.
"We are pleased that we now have certainty in this area,
enabling us to release £117 million of cash to the business today, and in the
region of £63 million over the coming years as we realise the remaining
losses.
"If we receive appropriate regulatory support, this
cash will form an integral part of the capital required to deliver our biomass
strategy, which in turn will provide the UK with cost effective, reliable and
flexible renewable electricity.
Drax has been lobbying the Government for reforms to the subsidy system for