Pension Capital Flows into £3bn Project to Modernise Britain’s Water Infrastructure

Image: The Haweswater Reservoir

Several of the country’s largest pension providers have backed a three billion pound project aimed at modernising the water supply system in the northwest of England. Six Local Government Pension Scheme funds, along with the defined contribution master trust Nest, have committed capital to the Haweswater Aqueduct Resilience Programme through their stakes in the infrastructure investment company GLIL.

The Pension Protection Fund has also stepped in with a direct investment of £ 60 million. In a statement, the fund described the deal as a significant milestone for its internal investment team, highlighting its growing role in long-term infrastructure projects.

Support has also come from annuity providers. Aviva has committed £ 200 million to the programme, while Just Group has also participated but has chosen not to disclose the size of its investment. Both companies emphasised the importance of financing projects that ensure the long-term resilience of vital utilities.

Lee Belfield, investment director at GLIL Infrastructure, said: “This is a great example of how international collaboration and the deployment of local capital can deliver positive long-term impact for communities. As a partnership of UK pension funds, money from Manchester and Lancashire, as well as from elsewhere across the country, is powering this investment into the northwest from GLIL.”

Belfield added that the investment “reflects our continued focus on building and investing in UK infrastructure – delivering economic and social benefits across the country, while also delivering the stable, inflation-linked returns that come with infrastructure investment to our members”.

The Haweswater Aqueduct Resilience Programme is the first such development approved by the regulator, Ofwat, to be delivered through a “direct procurement for customers” model, which is designed to ensure competitive tendering for significant projects.

Earlier this year, GLIL created a specialist vehicle called Cascade Infrastructure, in partnership with asset manager Equitix and Austrian construction group Strabag. That entity has since been awarded the upgrade contract by United Utilities, which operates the aqueduct. The regulator Ofwat approved the programme as the first significant development to be delivered under its direct procurement for customers model, a structure designed to foster competition and keep costs in check.

Construction is scheduled to begin in 2026 and is expected to continue for nine years. Once complete, the project will enter a twenty-five-year maintenance phase to ensure reliability over the long term.

The Haweswater aqueduct itself is a feat of twentieth-century engineering. Built between 1933 and 1955, the 110-kilometre pipeline carries water from the Haweswater Reservoir in the Lake District to more than two million people living in Cumbria, Lancashire, and Greater Manchester.

Concerns about the ageing infrastructure were first raised by United Utilities two decades ago. Some repairs have been made since then, but the company concluded that a large-scale upgrade was essential to safeguard the future supply. Six separate sections of the aqueduct, spanning a total of 52 kilometres, will now be overhauled.

Louise Beardmore, chief executive at United Utilities, said the awarding of the contract and the investments marked “a significant step to ensure we have the right infrastructure to provide a resilient water supply to communities right across the region for decades to come”, as well as creating and supporting “hundreds of great quality jobs”.

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.”

Neha Dedakia, PPF

The Pension Protection Fund confirmed that its investment was executed entirely by its in-house team. Just Group’s contribution was arranged over two years through a strategic infrastructure debt partnership with Global Infrastructure Partners, which is a subsidiary of BlackRock.

Tim Cannon, a 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.”

The result is a financing package that brings together pension funds, annuity providers, asset managers, and international construction expertise, all focused on ensuring safe and reliable water for millions of households across the northwest of England.