Financial questions on hydro plant and aluminium smelter at Lochaber: FOI Review

Information requested

I. the size of the total gross liability of the Scottish Government under the 25-year financial guarantee relating to the hydro plant and aluminium smelter at Lochaber entered into in December 2016;
II. the methodology that was used to value the asset at the time of the agreement in 2016/17;
III. documents and correspondence including, but not limited to, slides, research and emails that were drawn up or sent as part of the Scottish Government's due diligence before entering into this guarantee.

Response

Further to your request of 26 April 2020, I have now completed my review of our response to your request under the Freedom of Information (Scotland) Act 2002 (FOISA) for:
I. the size of the total gross liability of the Scottish Government under the 25-year financial guarantee relating to the hydro plant and aluminium smelter at Lochaber entered into in December 2016;
II. the methodology that was used to value the asset at the time of the agreement in 2016/17;
III. documents and correspondence including, but not limited to, slides, research and emails that were drawn up or sent as part of the Scottish Government's due diligence before entering into this guarantee.

I have concluded that the original decision should be confirmed, with modifications.

You requested a review of our response to the first question, because you do not agree that the Scottish Government cannot publish the details due to commercial confidentiality, and you believe that public interest overrides any argument of commercial confidentiality.

I have considered the case afresh, and I have conducted a thorough review of the information held, and of the reasons behind withholding certain information. I have determined that we were correct to withhold the information in relation to the first question because an exemption under section 33(1)(b) of FOISA applies and the public interest lies in favour of withholding that information.
I have however, concluded that the original reply should have included more information surrounding the rationale behind applying this exemption, and I have provided further information below.

An exemption under section 33(1)(b) applies to the information requested because it relates to commercial information, and publication of this information may prejudice the commercial interests of the GFG Alliance and their entities or the Scottish Government.

In particular, the total gross liability is set in relation to power purchase agreement between the relevant businesses. Release of the quantum of the total gross liability could result in a substantial competitive disadvantage in the smelter’s commercial negotiations with its customers and suppliers. Further, the power purchase agreement relates to only a proportion of the power generated by the site at Lochaber. Similarly releasing the total gross liability could result in a substantial competitive disadvantage in the hydro’s commercial negotiations with its customers.

The public interest lies in favour of upholding the exemption under section 33(1)(b) for the reasons given in our previous response. 

I have also concluded that an exemption under section 33(2)(b) of FOISA (financial interests) applies to the information requested, because disclosure of this particular information would, or would be likely to, prejudice substantially the financial interests of the Scottish Government given our substantial commitment in Lochaber and the potential damage to the financial interests - including to the ability to sustain employment and the wider economic development benefit - that such a release could have. Given our commitment to Lochaber, releasing this information could cause substantial competitive disadvantage to the Lochaber site and the subsequent adverse impact on its future trading with the potential to prejudice substantially the financial interests of the Scottish Government.

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 in protecting the financial interests of the Scottish Government to ensure that we are always able to obtain the best value for public money, as well as ensuring the Scottish Government is able to support the community.

About FOI

The Scottish Government is committed to publishing all information released in response to Freedom of Information requests. View all FOI responses at http://www.gov.scot/foi-responses.