National Wealth Fund commits £600m to ScottishPower grid upgrades - Trade Treasury Payments

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National Wealth Fund commits £600m to ScottishPower grid upgrades

The UK’s National Wealth Fund (NWF) has committed £600 million to accelerate electricity transmission upgrades across Scotland, forming part of a £1.35 billion financing package led by Bank of America. The funding will support infrastructure delivery through ScottishPower, the UK subsidiary of Iberdrola, as part of the government’s broader effort to decarbonise the power system and reduce long-term system costs.

The transaction includes co-financing from a consortium of commercial banks (BankInter, BNP Paribas, Caixabank, Lloyds, NatWest, and Banco Sabadell) coordinated by Bank of America as Sole Debt Arranger. The NWF’s contribution represents a significant public sector signal in favour of blended financing for grid modernisation.

Seven priority projects are expected to be financed under this package, ranging from new substations to the reconfiguration of high-voltage overhead lines. These investments are intended to alleviate existing transmission bottlenecks and improve the system’s ability to move renewable power efficiently from generation hubs (primarily in Scotland) to centres of demand across England.

A central component of the upgrade is the Eastern Green Link programme, specifically EGL1 and EGL4. These subsea interconnectors, identified by the National Energy System Operator (NESO) as critical to achieving the UK’s Clean Power 2030 ambition, will strengthen system integration between Scotland and the North East of England. 

According to NESO, EGL1 addresses one of the most constrained boundaries in the UK electricity network, where renewable output frequently exceeds transmission capacity, leading to higher curtailment and congestion costs.

John Flint, CEO at National Wealth Fund, said, “Upgrading the power grid is one of the most significant barriers to decarbonising our economy, and the scale of investment needed to address this challenge is substantial. Our financing will support some of the most vital grid upgrades that will have a major impact on the transition to a renewables-based electricity system and help address the grid constraints that make electricity more expensive for businesses and consumers.”

The government has identified the scale of transmission investment required to deliver a clean power system by 2030 at approximately £60 billion. While today’s announcement covers a fraction of that, it is being positioned as a test case for unlocking greater volumes of institutional capital.

Rachel Reeves, the UK’s Chancellor of the Exchequer, said: “Upgrading our energy infrastructure is good news for businesses, households, and the economy. It will bring down bills, put more money in working people’s pockets and enable businesses to expand. That is why I am so pleased to see the National Wealth Fund securing deals such as this. This is our Plan for Change in action, delivering long term economic growth and the jobs of the future whilst making Britain a clean energy superpower.”

Energy Secretary Ed Miliband said, “We need to get Britain building so we can deliver on our Plan for Change to protect billpayers, unleash growth and create jobs. This investment will help to deliver clean power by 2030 by speeding up grid upgrades – bringing cheaper, homegrown renewable power into homes and businesses, while supporting skilled jobs across the country.”

Beyond the physical infrastructure, the upgrades are expected to generate knock-on economic effects through job creation and regional investment, particularly in construction and engineering services. For ScottishPower, the funding aligns with Iberdrola’s UK investment strategy, which targets £24 billion in network and renewable infrastructure by 2028.

Keith Anderson, CEO of ScottishPower, said, “Today’s announcement is a welcome step forward in the delivery of the Government’s Clean Power 2030 pathway. Working together to drive forward these critical investments is an important catalyst for economic growth, as we make progress in bringing more renewables onto the system to meet the increasing demand for electrification.”

Bernard Mensah, President of International at Bank of America, said, “Bank of America is pleased to partner with the National Wealth Fund on this significant investment. This innovative, tailored co-lending structure will help support Scottish Power with boosting both UK grid capacity and connectivity.”

The National Wealth Fund was established to direct patient capital into sectors deemed critical for long-term national competitiveness. Grid infrastructure, which is often overlooked due to long payback periods and regulatory complexity, is now increasingly viewed as central to unlocking the next phase of UK clean energy deployment.