Fees paid by GFG Alliance company: FOI release

Information requested

1. I want to make an FOI request to the Scottish Government about the total fee that has so far been paid by GFG Alliance companies under the 25-year guarantee entered into by the Scottish Government relating to the Lochaber hydropower plant and smelter.

2. I also want to ask when these payments were made

Response

1. The Scottish Government receives a fee in return for the guarantee that exists with respect to the Lochaber smelter and the associated hydro-electric power plant. In 2016, the total discounted value of the fee premiums over the 25 year period was valued, as per methodology required by IAS 17 Provisions, at £18.7m.

The Scottish Government Consolidated Accounts for the year ended 31 March 2021 (published in December 2021) show the carrying value of this financial asset in the accounts was reduced to nil as a result of the implementation of the new accounting standard.

2. While our aim is to provide information whenever possible, in this instance we are unable to provide some of the information you have requested because an exemption under section 33(1)(b) FOISA (commercial prejudice) applies to the dates when the guarantee fee payments were made. The reasons why that exemption applies are explained in Annex A.

Annex A

REASONS FOR NOT PROVIDING INFORMATION
An exemption under section 33(1)(b) of FOISA (commercial interests) applies to some of the information requested. This exemption has been applied to specific pieces of information related to the commercial interests of the parties to the Guarantee and Reimbursement Agreement. We have applied this exemption as release of the information would – or would be likely to – prejudice substantially the commercial interests of the commercial entities involved. We have applied this exemption as release of the information would – or would be likely to – prejudice substantially the commercial interests of the commercial entities involved. Release of this information is likely to weaken the negotiating position of the business while providing commercially sensitive information to competitors. It is also likely to have an impact on the long term profitability and attractiveness of the business to future investors.

This exemption is subject to the ‘public interest test’. Therefore, taking account of all the circumstances of this case, we have considered if the public interest in disclosing the information outweighs the public interest in applying the exemption. We have found that, on balance, the public interest lies in favour of upholding the exemption. We recognise that there is a public interest in disclosing information as part of open and transparent government, and to help account for the expenditure of public money. However, there is a greater public interest that the GFG Alliance can operate effectively in commercial contexts to ensure the continued profitability and viability of the business, give its position as a major source of employment in the West Highlands.

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