Warrington council buys £18m stake in Scottish energy firm
- Published
A council report said investing in the firm would help to lift 10,000 Warrington residents out of fuel poverty.
A council is set to spend £18m buying a 50% stake in the Scottish energy provider Together Energy.
Warrington Borough Council leader Russ Bowden said the investment would help people living in fuel poverty and generate income for the authority.
The council also plans to loan the firm £4m, if approval is granted next week.
Together Energy's auditors warned last year that it would need to secure "additional funding" in order to continue as a going concern.
Accounts for the Clydebank-based firm show it made a £6.9m loss in the year ending August 2018 but was now "trading profitably".
In a report finalised in June, auditors said the company would need to find "substantial additional working capital" by "late summer 2019".
Tackling fuel poverty
Mr Bowden told the ´óÏó´«Ã½: "With any investment the council needs to make sure it is properly risk informed but one of the key policy drivers for us is tackling fuel poverty".
A council report said the firm would supply "100% green energy" and "relieve" approximately 10,000 Warrington residents living in fuel poverty.
The report said the company would open a base in Warrington and would "develop a commercial model that generates a positive financial return to the council that can be reinvested in front line services".
The proposal was approved by the council's ruling cabinet last night although the £18m price tag was discussed in private.
The council said the benefits and risks of the investment will be discussed at a "workshop" next week before a final decision is made.
Bob Barr from the opposition Liberal Democrats said "the council is turning itself into the equivalent of a private equity fund or an investment trust when it ought to be a local authority service provider.
"Central government has pushed it into that position."
A spokesman for Together Energy said: "It's not unusual for a company to incur losses or to require a cash injection within the first three years of trading, and this was completely in line with our business strategy.
"The ethical and environmental synergies between the two organisations made Warrington Borough Council the best fit."