Trust facing momentous decision on further Viking investment
The Shetland community’s stake in the Viking Energy windfarm could be diluted if Shetland Charitable Trust fails on Monday to agree its £6.3 million share to get the project ready to go.Trustees are being called to a special meeting to decide whether to continue investing or sell up their 45 per cent share now for an estimated £58.5 million.
But they have been warned that prevaricating over the extra funding will see the trust left behind because windfarm partners Scottish and Southern Energy and the four local businessmen in Viking Wind Ltd will cover the financial shortfall instead, acquiring a bigger share in the venture.
The apparent need for an instant decision on an issue of such importance means Monday’s meeting in Lerwick Town Hall could be one of the most momentous in recent Shetland history. There will be real pressure on trustees to resist agreeing the extra funds with scores of protesters expected to be there from the anti-Viking group Sustainable Shetland.
Following last week’s government approval of a 103-turbine windfarm, the trust’s financial controller Jeff Goddard has advised that the level of risk to the trust has “gone down significantly”. He is recommending the extra funds be agreed, on top of the £3.4 million the trust has already spent on Viking.
He advises that although selling up now would produce a profit of around 17 times the investment it would “potentially take away most of the ‘Shetland’ influence on the project”.
In his report Dr Goddard states: “The ‘Shetland’ participants on the Viking Energy project team argue that ‘Shetland’s’ investment has ensured that the project will be managed with ‘Shetland’s’ needs in mind.”
Even continuing to be involved for another 18-24 months, when the windfarm is expected to be ready to go, could bump up the value of the trust’s share to over £141 million, according to figures from analysts Quayle Munro.
Dr Goddard said reasons to continue to invest include its financial attractiveness and trustees’ desire that the Shetland community participate in the “environmental management aspects” of the windfarm.
He said: “A decision from trustees as to whether to further invest or sell is required at this point. The project will continue activity meantime and will require further finance. If trustees do not make a decision that finance will be provided by the other participants in the project and so the trust’s share (and value achieved) will be diluted.”