Agreements confirmed for South Tees Development Corporation debts
TVCA has previously advanced funding to STDC of approximately £421m, prior to March 31, 202616:45, 06 Aug 2026Steel River Quay photographed in summer 2025 (Image: TVCA)A major loan agreement has been approved. . .
TVCA has previously advanced funding to STDC of approximately £421m, prior to March 31, 202616:45, 06 Aug 2026Steel River Quay photographed in summer 2025 (Image: TVCA)A major loan agreement has been approved for the South Tees Development Corporation (STDC). Tees Valley Combined Authority (TVCA) Cabinet members agreed proposals that would formalise existing arrangements between the combined authority and the industrial development corporation at a meeting on Friday, July 31. The meeting’s agenda asked TVCA Cabinet to note that the combined authority had previously advanced funding to STDC of approximately £421m, prior to March 31, 2026, “broadly for four different purposes”. Papers added that formal loan agreements had not previously been completed for the borrowing arrangements, but interest terms were informally agreed with both parties. In addition, two of the loan types had not been subject to a principal repayment plan, either informally or formally. There are four loan types that have been advanced in recent years:The acquisition of the SSI steelworks site, for which £46. 5m was advanced between 31 March 2019 and 31 March 2022. The construction of the Steel River Quay for which £112m was advanced by the UK Infrastructure Bank to TVCA to on-lend to STDC. General site enabling works for costs directly incurred by STDC on site preparation and infrastructure. As at 31 March 2026, £235m has been advanced. Private sector forward funding agreement works, where the costs are the responsibility of the private sector counterparty, but STDC has carried out the works on its behalf. As at 31 March 2026, TVCA had advanced £27m. STDC, which was formed in 2017, was the first mayoral development corporation outside of London. In 2019, the 4,500-acre STDC site south of the river Tees was renamed as Teesworks. Earlier this year, debt levels at the STDCtriggered fears over its financial sustainability- and prompted a call to take back regeneration land fully into public ownership. Back in March, STDC said its financial plan provided a “clear basis for debt repayment”. STDC’s debt is described in the latest report as “sustainable”. The Cabinet approved the formalisation of loan agreements governing all existing loans advanced by TVCA to STDC. The payment mechanism is described as “bespoke” in TVCA documents, to ensure the repayment of all loans to STDC that are due to be repaid by the end of the business rates retention agreement in 2046, and includes future loans envisaged in the STDC medium term financial plan. The loan agreements will include a “review mechanism”, which will require TVCA and STDC to review the repayment profile, affordability assumptions, cashflow position, reserves position and relevant income forecasts at least once each financial year. Independent financial modelling advice was received from treasury advisers at Arlingclose, who said that their report had been produced using TVCA data. TVCA documents add: “The Arlingclose work provides confidence that, under the current medium term financial plan assumptions and with the proposed repayment mechanism, STDC can repay the relevant TVCA loans within the remaining period of the business rates retention arrangements, while maintaining financial resilience, even within a stressed scenario. ”As part of the decision, the Cabinet delegated authority for the final loan agreements to be completed by officers and the portfolio holder for finance, currentlyMiddlesbroughLabourMayor Chris Cooke. Delegation was also granted to approve future loan advances, within the already approved £350m loan facility, to STDC. Amendments put forward byStocktonleader, Labour Councillor Lisa Evans, were approved, which she said will "provide additional assurance for Cabinet that we remain informed and retain the decision making oversight, when there are significant changes to the financial position or repayment arrangements”. One of these amendments said that if the agreement terms extend beyond the loan repayment period outlined in the report, or if the financial impact on TVCA was to be different from the report, than Cabinet would need to approve such a matter. The loan agreements, approved by the Cabinet, will be subject to a separate approval process by STDC Board. From a finance officer perspective, the recommendations transition TVCA and STDC from “historic informal arrangements to a documented, monitored and enforceable loan framework”. The Quay loan follows a separate repayment profile aligned to TVCA’s underlying borrowing from UK Infrastructure BankIn a statement, separate to the meeting, Tees Valley Tory Mayor Ben Houchen said: "The transformation of Teesworks is creating jobs, attracting investment and laying the foundations for long-term economic growth across Teesside,DarlingtonandHartlepool. As the project continues to develop, this ensures financial arrangements supporting that regeneration are robust, transparent and provide value for taxpayers. ""These agreements give greater clarity over how loans are managed and repaid, while providing the confidence needed to continue investing in the infrastructure and development that is helping to bring this site back to life. "Meanwhile, Middlesbrough Mayor Cooke, TVCA Cabinet portfolio holder for finance, organisational improvement and business growth, said: “Teesworks is one of the most significant regeneration projects in the country, and it’s vital that the financial arrangements supporting its continued development are strong, transparent and accountable. “By formalising these loan agreements, we are putting in place a clear framework that protects public investment, provides certainty for future decision-making and supports the long-term success of the site. "Did you know you can make Teesside Live a preferred source of Teesside news in Google, which will mean you get more of our breaking news, exclusives, and must-read stories straight away?Here's more informationabout what this means and how to do it - you can also do it byclicking here. For the latest Teesside news direct to your inbox every day, sign up to our free newsletterArticle continues below