Canada Life, L&G and M&G among private debt investors in £3bn UK water infra project

Legal & General, M&G, MetLife, Canada Life, Scottish Widows, New York Life and Rothesay have emerged as investors in a major water infrastructure project in the UK, alongside Cascade Infrastructure, a consortium including GLIL and Equitix

The sponsors of Unitied Utilities’ £3bn (€3.48bn) Haweswater Aqueduct Resilience Programme (HARP) have raised between £2bn and £2.5bn of debt from around 30 lenders comprising a mix of institutional investors and commercial banks.

L&G Investment Management and M&G Investment Management confirmed that they are providing large tranches of debt financing that will run for at least the entire length of the nine-year construction phase of the project.

The refurbished Haweswater aqueduct and a 110km pipeline, including six underground tunnel sections, will continue the supply of water to 2.5m homes in Cumbria, Greater Manchester and Lancashire. Construction will begin in 2026.

UK specialist insurer Rothesay, MetLife Investment Management and Canada Life also confirmed to IPE Real Assets that they are investing in the project.

Aviva Investors, PPF and Just Group have also said they are among the institutional investors in the project. 

Other institutions that are investing in HARP are understood to include New York Life Insurance Company and Scottish Widows, according to sources.

John Carey, L&G IM’s head of infrastructure debt, Europe, said: “The provision of critical daily services is always something that is going to appeal to us within the infrastructure strategy.

“It is also a long-dated concession, so an opportunity to invest long term debt. it will be completed over nine years, with a number of sections. So that staggered approach was another feature of the project that we liked, because we think that that works well in terms of risk management of a long construction phase. All of these aspects align with [a strategy] that makes sense for our clients.”

Andrew McCormick, from M&G’s project & infrastructure finance team, said: “This is a watershed moment for critical infrastructure in the North West of England. As long term investors, M&G is pleased to support such a critical piece of infrastructure, providing lasting change for communities and the environment.”

MetLife confirmed that it has provided “a long-term fixed rate loan” to Cascade Infrastructure and its consortium owners – which includes Austrian construction company Strabag – to deliver the refurbishment of the 70-year-old aqueduct.

Aviva Investors is providing £200m of financing towards the design, build and maintenance of the HARP project. It is the latest investment made by Aviva Investors on behalf of Aviva’s IWR business into UK infrastructure.

Darryl Murphy, managing director, infrastructure, at Aviva Investors, said: “We are pleased to support a vital project to reinvigorate the Haweswater Aqueduct pipeline, the backbone of water supply for so many communities across the North West of the UK. We believe this represents a great opportunity to work alongside sponsors with long track records of strong financial performance, alongside a number of other experienced, high-quality counterparties.

“It is another example of how we are investing into UK infrastructure to help the country get ready for the future, whilst delivering long-term outcomes for our clients and, ultimately, savers.”

The Pension Protection Fund (PPF) said it has completed a £60m investment in the construction phase of the project.

Neha Dedakia, private credit portfolio manager at the PPF, said: “This investment shows the PPF at its best; delivering strong returns for our members while supporting critical UK infrastructure that millions of people rely on every day. Executing this complex deal directly in-house demonstrates the strength of our investment capability and underlines our role as a long-term, responsible investor in the UK economy.”

Tim Cannon, senior investment manager at Just Group, said: “Just is committed to financing nationally significant UK infrastructure that delivers long-term economic, social, and environmental value. Investing in the Haweswater Aqueduct Resilience Programme supports regional development while providing the secure, long-term income to pay our policyholders and delivering lasting value for stakeholders.”

Scottish Widows and New York Life declined to comment.

To read the latest IPE Real Assets magazine click here.