A new financial plan for the Circuit of Wales project aims to reduce Welsh Government underwriting to 49% of the cost of the project - which means around £210 million (US$261 million).

In July, we reported that the Government of Wales stated that it could not back the project unless the risks sharing in the project are balanced. The Government wanted a 50/50 split in financing and underwriting the project with the private sector.

Unlike the project’s previous funding model, the new one is not dependent on any funding, using their borrowing powers from the two local authorities that will benefit most from the project in Blaenau Gwent and Monmouthshire councils. The local authorities were asked to provide around £90 million (US$112 million).

The revised cost of the project is £425 million (US$528 million), of which it is understood that Aviva Investors as the lead investor is looking to commit around £270 million (US$335 million), of which an element would be risk capital.

The project owner, Heads of the Valleys Development Company, is looking to put around £67 million (US$83 million) in equity, which it has raised. The company has appointed Kleinwort Benson as financial advisor.

The Circuit of Wales will be located north of Ebbw Vale close to the Rassau Industrial Estate. The development will span 336 hectares and represent the most significant capital investment program in automotive and motor sports infrastructure in the UK in the last 50 years.

The main race track is 3.5 miles in length and there will be additional smaller circuits for karting, motocross and 4x4, hotels, retail space and a technology park, among others. The circuit is being designed to FIA and FIM high standard levels.

In February we reported that just weeks ahead of the beginning of works on the project, Alun Griffiths, one of the main contractors, had been replaced by civil engineering firm Roadbridge. Spanish construction company FCC is the project’s main contractor.