Browne Jacobson supports Welsh Government with key investments into Morlais tidal power project

Browne Jacobson has played a key role in bringing Europe’s largest consented tidal energy project to life in North Wales by advising on significant new investments.  

The UK and Ireland law firm has assisted the Welsh Government through multiple deals that will finance and enable the Morlais project, set to launch next year. 

Owned and managed by Ynys Môn social enterprise Menter Môn, the Anglesey site has the potential to generate enough energy for up to 180,000 typical Welsh households, offering a unique “plug and play” model for developers of tidal energy devices. This will help reduce costs as they scale up operations to generate clean electricity. 

Browne Jacobson has worked with the Welsh Government on a series of investments to help fund the Cydnerth phase of the project, in which the grid connection is strengthened at Parc Cybi, Holyhead. 

Having advised the Welsh European Funding Office on its original £31m secured grant funding to support the project in 2022, a multi-disciplinary team at Browne Jacobson has now supported the devolved administration in further transactions.  

These involved taking an £8m equity stake via an effective debt-for-equity swap mechanism, securing additional funding via Ambition North Wales and completing a complementary £2m equity investment into marine energy group Inyanga Marine Energy Corp (IMEG).  

IMEG’s engineering arm will install tidal devices and its turbines will power most of the site’s energy generation operations.  

An affiliate entity of IMEG – in which the Welsh Government took a mirror equity stake – holds contracts for difference in respect of Morlais sites. 

Paul Hill (Partner, banking) led the Browne Jacobson team, supported by Kirk Glenn (Partner, corporate), James Busby (Partner, banking) and Zoe Stollard (Partner, projects). 

Paul said: “The UK and Wales’ expansive coastline provides us with enormous opportunities for tidal power generation and Morlais will be a pioneer in driving forward a technology that will unlock significant renewable energy generation. 

“These latest transactions are key milestones in the development of a project that has huge potential in supporting energy resilience and decarbonisation – issues at the forefront of society’s biggest issues – and we’re excited to be supporting the Welsh Government on its ongoing commitment to Morlais. 

“The latest investments will ensure the Welsh Government not only remains at the heart of the project and maintains its progress, but ensures the taxpayer stands to benefit from a return on this significant investment once the site is operational.  

“The transactions demonstrate our ability to offer a streamlined full service in the tidal and marine energy sector, building on our broader credentials across large-scale, complex energy and infrastructure projects.” 

Tim Edds, Partner and Head of Browne Jacobson’s Cardiff office, said: “Our work on these transactions are the latest examples of our wide-ranging partnership with the Welsh Government, which stretches back more than 25 years and was cemented by our reappointment to the Welsh Government Commercial Delivery legal services panel earlier this year. 

“Advising Welsh Government on the Morlais project demonstrates our strong energy credentials, having also worked on the establishment of Trydan Gwyrdd Cymru, the renewable energy development company for Wales.  

“When combined with the nation’s two freeports, it signals to investors the wealth of opportunities available across the full green energy spectrum.”

The Morlais project has the potential to generate up to 240MW of low-carbon electricity. 

It has been underway since 2014, when the Crown Estate designated a 35sq km area of the seabed near Holy Island, Anglesey, as a demonstration zone for tidal energy.  

After securing the lease in a competitive tender, Menter Môn obtained consent to develop the scheme from the Welsh Government and Natural Resources Wales in December 2021. 

Since then, it has developed the infrastructure for tidal energy technology developers to install their devices at sea. 

Speaking about the project, First Minister Eluned Morgan said: “This investment is a big step forward for Wales' clean energy future. Tidal energy offers reliable, clean power and creates quality jobs in coastal communities where they're needed most. 

“By investing in innovation, we're putting Wales at the forefront of marine energy technology. The improved turbines will explore making tidal energy more practical, helping speed up the global move away from fossil fuels.”