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28/06/2013

News release issued by Tees Valley Unlimited

A £10m fund, backed by the Government, has been launched by Tees Valley Unlimited to help companies bid for work to further strengthen the local economy.

The Tees Valley Catalyst Fund is the first of its kind anywhere in the UK and is uniquely available to Tees Valley companies and projects.

It will enable Tees Valley companies to bid for contracts larger than they can at present, opening up new markets and opportunities.

The fund, which is backed by the Regional Growth Fund, will provide security for performance bond guarantees. Performance bonds provide a financial guarantee to a contractor that a supplier will deliver on time and to standard.

The fund was launched by Lord Shipley, Deputy Chair of the RGF Independent Advisory Pane.

He said: “I know that businesses across the Tees Valley will welcome this fund with open arms as it will give them the confidence to invest and create jobs for the local economy. I would strongly encourage small and medium sized businesses to see how the fund can support their ambitions.

“Overall the Regional Growth Fund is having a hugely positive effect across the North East in many different sectors. We need to keep the momentum going and work together through schemes such as RGF and the Tees Valley Catalyst Fund so that we can continue to grow and build a stronger economy.”

Tees Valley Unlimited, the Local Enterprise Partnership for Tees Valley, has taken action after pinpointing that a lack of help to provide bonds was a barrier to growth for many companies in the region.

It is anticipated that the Tees Valley Catalyst Fund will unlock almost £700m of additional work and support approximately 1,440 jobs in Tees Valley during the next ten years. 

It will be available for companies which create jobs in the Tees Valley.
 
Sandy Anderson, Tees Valley Unlimited chairman, said: “Our engagement with Tees Valley companies has revealed that they are often shortlisted at tender stage on technical capability; however they lack the cash reserves needed to set up the required bond facility.

“One of the key remits of TVU is to overcome obstacles that prevent growth and development by local companies.

“The Tees Valley Catalyst Fund is a prime example of how Tees Valley Unlimited is creating unique, innovative schemes to proactively help local firms grow and generate jobs.”

George Rafferty, Chief Executive of NOF Energy, the business development organisation for oil, gas, nuclear and offshore renewable sectors, said: “The Tees Valley Catalyst Fund is a pioneering initiative that will greatly benefit ambitious Tees Valley companies, including those in the energy sector supply chain.

“It will make a vital contribution to the ability of private sector companies in Tees Valley to bid for significant contracts that have the potential to bring wealth and jobs to the area.”

The fund, which will be managed by FW Capital, will be an ‘evergreen’ fund with interest and repayments on loans being ploughed back and recycled into new lending.

Peter Wright, FW Capital’s Investment Director, said: “Many established businesses in the Tees Valley have the capacity as well as the technical know-how to secure new contracts, but the financial guarantees that are often required can be a real obstacle.  Winning new contracts could significantly boost their prospects and the Tees Valley Catalyst Fund can provide them with the financial backing they need.”

Funding is only usually required for a relatively short period - typically18-24 months from contract confirmation to completion.  Money is often released in staged payments by main contractors up to final sign-off and/or release of the bond.

Although primarily aimed at small and medium-sized businesses (SMEs), larger companies, which may already have a bond facility in place, will be able to access the fund to extend their existing facility to account for significant, one-off contracts which otherwise they may be unable to bid for.

Tees Valley Catalyst Fund