Somerset Council has announced the withdrawal of a £150 million borrowing commitment previously earmarked to support infrastructure for Somerset’s ambitious £4 billion gigafactory project. Despite this shift in funding, construction of the Agratas facility at the Gravity enterprise zone, located between Puriton and Woolavington, continues to make steady progress.
The gigafactory is expected to bring up to 4,000 new jobs to the region once fully operational. A recent construction milestone was celebrated with the completion of the steel frame for ‘Building One’—a structure built using 23,000 tonnes of British steel, mirroring the amount used for Wembley Stadium.
Earlier, in March 2024, Somerset Council had planned to invest up to £150 million through external borrowing to finance targeted infrastructure enhancements, aiming to de-risk the investment for private backers. However, after ongoing negotiations with Agratas and the Department for Business and Trade (DBT), the council has opted for alternative financing solutions that do not involve borrowing.
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Nicola Hix, the council’s director of finance and procurement, emphasized the council’s continued dedication to developing infrastructure within the Gravity enterprise zone. She highlighted plans to reinvest business rates generated by the gigafactory back into the local community to stimulate further economic growth. This reinvestment is intended to support initiatives such as workforce development and strengthening connections between existing and new communities.
The £150 million had been included in the council’s capital programme following approval in March 2025. Instead of borrowing, the council had structured the funding to be disbursed “in arrears” upon reaching key project milestones, such as completion of important roads or cycle paths. Additionally, a £55 million grant from the DBT was secured upfront, easing financial pressures on the council.
Ms. Hix explained that ongoing discussions have led to an agreement to deliver the £150 million worth of infrastructure improvements through grant funding and business rates growth within the enterprise zone, effectively eliminating the need for upfront borrowing. Once these arrangements are finalized, the council will seek formal approval to update the capital programme accordingly.
Somerset Council is set to approve its annual budget on March 4 in Bridgwater, which will include a 4.99% increase in council tax for residents. This budget will reflect the latest funding changes for the gigafactory and reaffirm the council’s commitment to supporting regional economic development through the project.