L&G backs Northern Irish gas project with £200m financing
Legal & General’s investment management’s real asset division has invested £200m (€224.6m) into a gas infrastructure expansion project in Northern Ireland.
LGIM Real Assets said, on behalf of its client Legal & General Retirement Institutional (LGRI), it will invest the amount in West Transmission Financing, a subsidiary of Mutual Energy.
The funds will be used to cover construction costs of the Gas to the West project. The project will also benefit from government grant assistance.
Once complete the 80km extension will be operated by West Transmission and will provide gas to 40,000 residents and numerous businesses in eight towns that have historically relied on oil and coal.
Tom Sumpster, the head of infrastructure finance LGIM Real Assets, said: “We are delighted to be providing 100% of the debt financing to support Mutual Energy’s subsidiary West Transmission in a deal which helps to further diversify our clients’ investment portfolio, both in terms of asset class and geography, and evidences our ongoing commitment to financing assets that benefit local communities.”
Construction is already underway, with the expectation that they will be fully operational in 2019.
“As owners and operators of existing pipelines, as well as electricity and gas interconnectors between Northern Ireland and Scotland, Mutual Energy are well placed to deliver this much-needed gas network expansion to the west of Northern Ireland,” Sumpster said.
Hayley Rees, the head of direct investments at LGRI, said LGRI aims to make investments in real assets which are consistent with its social purpose and both boost the local economies and secure the payments to pension holders.
“We have accomplished much already in the field of infrastructure and are delighted that this investment adds to this activity. We continue working closely with LGIM Real Assets to increase these investment opportunities.”
Paddy Larkin, the CEO of Mutual Energy, said: “Having no shareholders, any financial surpluses are for the benefits of energy consumers.
”By securing this long-term commitment to the natural gas industry in Northern Ireland, all the cost savings from this financing arrangement will, therefore, pass through to consumers for many years to come.”