Iberdrola has secured a GBP 1.35 billion financing package from the UK’s sovereign wealth fund, National Wealth Fund (NWF), and commercial banks to help deliver upgrades to the UK’s transmission grid. It includes a GBP 600 million commitment from the NWF, and forms part of the financing package led by Bank of America as sole debt arranger, and including Bank of America, BankInter, BNP Paribas, Caixabank, Lloyds Bank, NatWest, and Banco Sabadell as lenders.
NWF’s financing will support the delivery of seven of ScottishPower’s priority transmission grid upgrade projects, which will be delivered by its subsidiary SP Energy Networks’ unit Scottish Power Transmission (SPT), which manages the central and southern Scotland transmission grid. These projects include Eastern Green Link 1 (EGL1), an interconnector between Scotland and the northeast of England, and Eastern Green Link 4, which will connect Scotland with Norfolk in eastern England. These interconnectors will help facilitate more renewable energy, reduce constraint costs, lower the cost of electricity for businesses and consumers, and unlock growth across the UK.
The scale of investment required to upgrade the UK electricity grid in support of the government’s Clean Power 2030 Action Plan is significant. In its independent advice to the government on the pathway towards its 2030 ambition, the National Energy System Operator (NESO) estimates that up to GBP60 billion of investment is required annually up to 2030 to support the delivery of a clean power system. In addition, NESO has identified EGL1 as a crucial project for the delivery of this Action Plan.
The financing will also deliver grid upgrades in five key locations across Scotland, including the building of new substations, overhead line reconfiguration, and the improvement of overhead transmission cables to increase both capacity and resilience. NWF’s commitment will help to mobilise private finance in support of Iberdrola’s plans to invest GBP24 billion up to 2028, through ScottishPower, in the UK’s electricity network and renewable generation infrastructure.
