Otterpool Park Update: Proposed Solar Farm company will milk profit from sunshine and send it to one of the most notable tax havens in the world

Making money from Solar energy is big business. Folkestone & Hythe Cabinet on Wednesday 12 February, will discuss the approval and recommendations to accept SNRG Ltd as the contractor to provide Solar energy to Otterpool Park.

The company – SNRG Ltd –  is ultimately owned by a company in a known corporate tax haven – Luxembourg – one of the most notable tax havens in the world

Regardless of the 15% discount on the energy tariff on offer to future homeowners at Otterpool Park, the company who owns SNRG Ltd will, if agreed by Cabinet, milk profit from sunshine and send it offshore to Luxembourg.

At Folkestone & Hythe District Council’s Cabinet on 12 February, Report Number C/24/68 will be discussed. The report is the Otterpool Park Solar Park (orange below) and Smart Grid Business Case update. 

Within the report it states:

The preferred solar park developer SNRG Ltd working with Otterpool LLP and the Council have identified that the combination of the smart grid and solar park (phase 1)

Two of the five recommendations in the report are:

To note that a full and thorough legal review of the Options Agreement and Heads of Terms will be undertaken.

To provide delegated authority to the Director of Housing and Operations and the Council’s S151 Officer following the legal review to sign the Options Agreement and Heads of Terms with the preferred solar park provider, SNRG Ltd, to enable them to apply for planning consent.

The Council’s consultant STANTEC undertook soft market testing on their behalf and approved the appointment of SNRG as the preferred investor, developer and operator of the solar park (phase 1)

SNRG will fund, own and operate the solar park and connection to the smart grid serving Otterpool Park, and remain fully accountable for servicing the investment, delivery, performance, compliance, customer satisfaction and all financial transactions. The Council will have no ongoing financial liability. SNRG will also be responsible for all land management and maintenance requirements associated with the land ownership of the solar park which will be detailed in the lease agreement.

Appendix 2, which go before the Cabinet is a A Review of Cabinet Recommendation for the Solar Farm by STANTEC. It says among other things:

SNRG will design, build, fund and operate the solar farm over the lifetime of the facility. There is no planning, build or operational cost or risk to FHDC.

The annual land rent would increase from £9,370 (agricultural use) to £120,000. This return is achieved regardless of the uptake to Smart Grid connections and paid from the point planning permission is granted.

A £50,000 payment will be paid to FHDC by SNRG upon entering an options agreement. This will fund FHDC’s legal costs with developing the Options Agreement and Lease Agreement. A further £50,000 is to be made available to support FHDC’s legal costs in supporting the planning application.

Homeowners will benefit from a 15% discount on their energy tariff to encourage use of the Smart Grid network.

Based on a significant uptake in connections to the Smart Grid, a return of £24.8m over 30 years is achieved.

So who are SNRG?

SNRG Ltd latest set of accounts, on Companies House, states: 

SNRG Limited is under the immediate control of SNRG Investments Limited, a company incorporated in England and Wales. Until 28 April 2022, SNRG Limited was under the ultimate control of the director, S Hussain, by his 100% interest in the parent company’s capital. Following the restructure and capital subscription in the immediate parent as of 28 April 2022, the Company was under the control of Antin Infrastructure Services Luxembourg II SARL., and the ultimate controlling party is a group of funds managed by Antin Infrastructure Partners.

In 2023, Antin Infrastructure Services Luxembourg II SARL paid €231,160 in taxes, or £192,605 latest data available. That’s not a great deal for an international company.

So SNRG Ltd are ultimately under the control of a company based in the Corporate Tax Haven known as Luxembourg. “Luxembourg allows billionaires and big corporations to avoid paying their fair share of taxes… In terms of facilitating tax avoidance, Luxembourg and the Cayman Islands are at the same level.”. The company, SNRG Ltd, is part of a structure to avoid tax, NOT evade it. 

Not so long ago, at a meeting of the full Council on 25 Sept 2019, The Shepway Green Party, lead by former Cllr Lesley Whybrow raised the following matter: 

Full Council notes that:

Around 17.5% of public contracts in the UK have been won by companies with links to tax havens.

It has been conservatively estimated that losses from multinational profit-shifting (just one form of tax avoidance) could be costing the UK some £7bn per annum in lost corporation tax revenues.

Demand clarity on the ultimate beneficial ownership of suppliers and their consolidated profit & loss position

Support calls for urgent reform of EU and UK law to enable local authorities to better penalise poor tax conduct and reward good tax conduct through their procurement policies.

It was proposed by former leader of the Shepway Green Party Lesley Whybrow, and seconded by Cllr Jim Martin (pictured), who is now the leader of the Council.