Interview: Rob Cormie, managing director of Quayle Munro

As the head of the merchant bank’s Edinburgh office, Cormie is staking his business and his career that Scotland’s renewables industry – particularly offshore wind – will become massive.

“If that doesn’t keep me going until I call it quits, then there is something wrong. We are in the foothills of a great industry,” says Cormie, from his offices overlooking Castle Hill in the capital.

Sceptics get short shrift. “Oh, the flat Earth brigade,” he says, when it is pointed out to him that when compared to nuclear – or even shale gas – renewables is an expensive bet.

Last year, the investment bank Citigroup estimated it would cost £46 billion to meet the Scottish Government’s target of producing 100 per cent of its energy through renewables, plus an extra £4bn a year of public money to keep going. Added to this is the risk that household electricity bills could soar by £875 a year.

The uncertainty surrounding the finances – linked generally to Europe’s weakened financial state – prompted Doosan to pull out of plans to develop a £170 million offshore development centre for Scotland.

But for Cormie, renewables are not just a nice thing to have but an essential part of the energy mix.

He is strangely dismissive of the potential of shale gas – which has driven down prices in the US substantially and is considered to be a low-carbon option.

“It’s a load of nonsense,” he says. And while he knows that wind energy only works when the wind blows, he insists that it is an essential part of the “mix” – despite the costs.

He also believes the scale of investment required is not unlike that of the North Sea oil and gas industry 40 years ago.

“Offshore wind, yes it is expensive, but we are still very early days. If you go back to the North Sea oil, it is not dissimilar in terms of cost curves. We are only in the first real generation of offshore wind turbines.

“No-one is saying it is not difficult.”

And he should know. Quayle Munro, which has offices in Edinburgh and London, has targeted growth in its renewables finance advisory services as a major part of its future.

The London office, which last year advised Sir Richard Branson on Virgin’s acquisition of Northern Rock, focuses on media, while the company also does corporate work on infrastructure projects, such as schools building – a business what has slowed down.

Cormie had also harboured hopes of developing a debt management business – ideally a rich field in Scotland where several companies that had enjoyed a close relationship with freewheeling senior bankers at HBOS are now left with unmanageable debt burdens.

However, he admits that while this is still a focus for Quayle Munro, it “didn’t help” when Stuart Roberts, who was primarily responsible for the development of its debt advisory function, joined construction group Robertson as group finance director in November.

Most the of the firm’s work in the renewables sector has not, however, been in offshore wind development – which is still in its infancy. Instead, the firm’s teeth have been cut on less expensive – but more politically divisive – onshore development.

This year so far, Cormie’s team has advised Norwegian company Jæren Energi, owned by two Japanese firms, Toyota Tsusho Corporation and Tokyo Electric Power Company, on a second phased debt funding package for a wind farm near Stavanger.

In January, the team also put together a £94m debt package – provided by Lloyds Banking Group and Royal Bank of Scotland – for the Carraig Gheal onshore wind farm east of Oban, which is being developed by Norwegian firm Statkraft and Alloa-based Greenpower.

More recently, Quayle Munro acted as an adviser on the recently-approved Viking wind farm in Shetland.

The wind farm project is a joint venture between SSE and the Shetland Charitable Trust.

While recent figures show that RBS lent about £230m to wind farms and other alternative energy developers, and Lloyds paid out some £113m, Cormie figures it is not the traditional lenders that will fund Scotland’s renewables industry.

Rather, older, more fundamental institutions established after the Second World War to finance trade and recovery are set to step into the breach.

Cormie points to Prime Minister David Cameron’s recent trip to Japan, which resulted in the signing a “memorandum of understanding” with the Japan Bank for International Cooperation (JBIC).

On the same day, Japanese conglomerate Mitsui – a major partner of JBIC – took a 25 per cent stake in Global Energy’s Nigg yard, which is tipped to be a major port for fabricating North Sea oil facilities and wind turbines.

“The amount of capital needed is not available from the traditional sources,” observes Cormie. “The role of the development banks were as post-war export driven banks to fund tractors to Africa.

“They have had to develop as well. Initially it was dams in Uganda, but the world has changed,” he says.

Cormie was also one of the leading campaigners to establish the £3bn Green Investment Bank (GIB) in Edinburgh.

“It is incumbent on Edinburgh now to make sure that GIB is welcomed and brought into the fold, but it is quite important we get some of the senior jobs up here,” he says.

“It is amazing how many people who do have offices here – it is a very good place to be the centre of this particular industry.

“We all have to go to London to get money, but we also go to New York, the Middle East, pension funds, and the banks.

“The fact the money is London doesn’t really matter.”

30 SECOND CV

Born: Aldershot, 8 June, 1965

Education: Kings College Wimbledon; Marlborough College; Edinburgh College of Art; Cranfield Business School

First job: Paperboy… more seriously, trainee architect

Ambition while at school: To play golf with Seve Ballesteros at Augusta and play cricket with Ian Botham at Lords

Car: Volvo XC70

Kindle or book? Neither, I don’t read

Music: Madness, Mozart, Pink Floyd and Velvet Underground

Can’t live without? BlackBerry

Claim to fame: Still waiting

Favourite place: Lords Cricket Ground

What makes you angry? Betrayal

Best thing about your job: The view of Edinburgh Castle from our office