Agreement made to create local authority-owned limited company to house major development in south-east Wales
The Cardiff Capital Region (CCR) Regional Cabinet today (July 14) agreed to create a special purpose vehicle to support the development of a Compound Semiconductor industry cluster in South East Wales.
The decision follows an agreement by the Regional Cabinet to contribute £37.9 million from the Cardiff Capital Region City Deal’s Wider Investment Fund towards the establishment of a major, cutting edge facility, as an anchor in the region for high end production of compound semi-conductors. The aim being to support the development of a Compound Semi-Conductor Industrial cluster in the region, with the potential to:-
- lever £375m of private sector investment,
- create up to 2,000 high skilled jobs,
- return the investment for use on other regional schemes, and
- has potential for hundreds more in the wider supply chain cluster development.
It is the first such investment since the £1.2 billion CCR City Deal programme was formally signed by the leaders of the ten local authorities in the region on March 1.
The facility at Newport will be owned by the 10 Councils under the special purpose vehicle ‘CSC Foundry Limited’ or ‘LDC Ffowndri Cyn’, and the space leased for Compound Semiconductor manufacturing and applications development. helping the establishment of the world’s first Compound Semiconductor Cluster in the region.
The CCR City Deal seeks to position the region as the global leader in Compound Semiconductor enabled applications.
In 2016, Innovate UK – the UK Government’s innovation agency – announced it will invest £50million to establish a new Compound Semiconductor Catapult Centre of Excellence in Wales which will now locate in the CCR. This new Catapult will build on existing investment by Cardiff University, IQE plc, and Welsh Government.
The Regional Cabinet heard that the project has been subject to a detailed due diligence process to provide expert assurance to decision-makers that outputs are achievable and affordable.
Importantly the project is not a grant or a loan – it is a commercial investment with ownership of the foundry remaining with the 10 Councils. The proposal seeks to return the original investment plus interest over the life of the project.
Councillor Andrew Morgan, Leader of Rhondda Cynon Taf County Borough Council, and Chair of the CCR City Deal Regional Cabinet, said:
“This is the first tangible demonstration of this City Deal in action – sending a very clear message of a commitment to actions not words from South East Wales as a region
“The objective of this commitment is to create a complete compound semiconductor eco-system in South Wales to take advantage of the growing prominence of compound semiconductor technologies.
“The opportunity this investment creates, to help the establishment of the world’s first Compound Semiconductor Cluster in South East Wales, should not be underestimated
“It has the potential to place our region at the heart of this cutting edge sector and will require the development and integration of a compound semiconductor supply chain in South Wales, with the economic and social benefits that will bring.
“Further to the in-principle decision made by this Cabinet on May 2, the Cabinet is satisfied that all conditions have been met, and that the SPV can now be set-up to enable this innovative and exciting development to happen.
“The creation of the City Deal has delivered the capability and capacity to develop this significant opportunity for South East Wales, which will deliver economic benefits across the region.”
More information on City Deal
- The Cardiff City Deal is a £1.2 billion deal to unlock significant economic growth across the Cardiff Capital Region (CCR)
- The specific aims of the CCR City Deal can be summarised to: improve productivity; tackle worklessness; build on foundations of innovation; invest in physical and digital infrastructure; provide support for business; and ensure that any economic benefits are felt across the region
- The Shadow Regional Cabinet comprising the leaders of the 10 local authorities in south east Wales was set up in 2016 to provide the leadership, vision and strategic direction for the Cardiff Capital Region; help shape and manage the City Deal programme and structure; integrate and align the City Deal agenda with the Metro ; prioritise projects which demonstrate the potential to achieve real economic improvements across the region; establish a secure platform for development encouraging alignment of relevant functions and activities and strategic application of funds as part of a fully integrated City Region approach; engage with wider stakeholders to encourage and support a collaborative approach to make the Cardiff Capital Region a success.
- The ten local authorities are: Cardiff, The Vale of Glamorgan, Rhondda Cynon Taff, Merthyr Tydfil, Caerphilly, Monmouthshire, Bridgend, Blaenau Gwent, Torfaen and Newport.
- The City Deal includes funding of £734m for the South Wales Metro, of which over £500 million is provided by the Welsh Government and £125m from the UK Government.
- The CCR Deal was formally signed on March 1, 2017, and the programme entered a transition phase
- The Cardiff Capital Region Transition Plan will detail key activity to be undertaken, including establishing a Regional Office to drive the delivery of the Regional Cabinet’s work programme in anticipation of receiving proposals. This includes the creation of a bespoke impact assessment model for those proposals.
- The transition phase will also see the creation and development of three advisory bodies to the Regional Cabinet - the CCR Economic Growth Partnership, a region-wide business representation organisation, and an Employment and Skills Board, and one delivery body, the Regional Transport Authority.
- The ten partnering Councils approved the Cardiff Capital Region City Deal (CCRCD) Wider Investment Fund (WIF) totalling £495 million, consisting of £375 million grant from HM Treasury, passported via Welsh Government over the next 20 years. The remaining £120 million will be contributed by the ten partnering councils based on their respective population base and is currently modelled as being 100% capital in nature.
Posted on Friday 14th July 2017