National Grid is to use a £1.5bn loan from the European Investment Bank to protect facilities and update infrastructure across its national electricity transmission network.
The new support – for connecting new power generation, upgrading ageing assets and improving network resilience to climate and security risks – represents the largest ever single loan made by EIB.
The new long-term loan will include capital investment by National Grid to reinforce infrastructure between the Wirral in North West England and Scotland, and the London Power Tunnels.
In a statement, Jonathan Taylor, EIB vice president said: ‘Investment in the UK electricity transmission network is essential to prepare for future demand, connect new sources of renewable energy and upgrade old facilities.
‘This agreement, the largest ever single loan to be provided by the European Investment Bank, reflects both the scale of energy investment needed and National Grid’s own experience in implementing such a diverse capital investment programme.’
Malcolm Cooper, global tax and treasury director at National Grid added that loan will be used to fund infrastructure investment and ‘build an electricity network for the future’.
The EIB backed programme will also include improvements to protect critical infrastructure from floods and providing substation capacity needed for new connections to offshore wind farms and new interconnectors to continental Europe.
Since 2009 the EIB has provided £5.7bn for investment in energy infrastructure across Europe, including electricity distribution, offshore transmission links, energy efficiency, interconnectors to the continent and wind farms such as London Array and West of Duddon Sands.
The EIB is jointly owned by all European Union (EU) Member States, lending money at attractive rates to support investment across the EU.
In a separate development, National Grid and The Berkeley Group Holdings have today announced the establishment of a new joint venture to develop major residential and mixed-use development schemes across London and the South East.
The partnership – dubbed St William Homes – brings together access to a portfolio of brownfield land owned by National Grid Property with Berkeley’s experience in the design, build and marketing of new developments.
According to Berkeley, National Grid has over 20 sites in London and the South East with the potential to provide over 14,000 homes over the next 10-15 years.
In its first phase, St William aims to develop more than 7,000 new homes, including over 2,000 affordable homes. Development at this scale would also deliver 5,500 jobs, two new schools and 22 acres of public open space, transforming 84 acres of former industrial land and contributing over £150m to local infrastructure and amenities.
St William Homes will commence development activity on its first site in 2016, with the first homes delivered in 2017.
Both events formed part of National Grid’s half-year results that were announced today. The company stated that it is on track to ‘deliver another year of strong overall returns and dividend growth’ and that investment of £3.1bn to £3.3bn is expected to drive regulated asset growth of around five per cent this year.