ScottishPower Locks In £1.35bn to Supercharge UK Grid Upgrade Projects

In a bold move toward transforming the UK’s energy landscape, the National Wealth Fund (NWF) has unveiled a significant £600m investment in Iberdrola’s subsidiary, ScottishPower, to overhaul the British power grid. This commitment is expected to create hundreds of jobs and play a pivotal role in ushering in a new era of clean, sustainable electricity.

This substantial investment is part of a wider £1.35bn funding package, orchestrated by Bank of America as the sole debt arranger, with an impressive lineup of lenders including Bank Inter, BNP Paribas, Caixabank, Lloyds Bank, NatWest, and Banco Sabadell.

NWF’s capital infusion will accelerate the deployment of essential resources for seven of ScottishPower’s most urgent transmission grid upgrades—all key to enhancing the country’s ability to deliver renewable energy. The project aims to cut congestion costs, lower electricity prices for businesses and consumers, and drive economic growth across the UK.

Upgrading the national grid is no small feat. The scale of the investment required to support the UK’s Clean Power 2030 Action Plan is staggering. The National Energy System Operator (NESO) forecasts that up to £60bn will be necessary to transition the country to a cleaner, more efficient power system by the decade's end.

In particular, the Eastern Green Link (EGL) projects 1 and 4, which NWF’s funding directly supports, are integral to scaling the UK’s renewable energy infrastructure. These projects aim to enhance the UK’s capacity to transport clean electricity from Scotland to England, via strategic interconnectors that connect Scotland’s renewable energy hubs to the North-East of England and Norfolk.

NESO has singled out EGL1 as vital to achieving the Government’s Clean Power 2030 targets. As the UK's most constrained transmission boundary, the project will address critical challenges by alleviating congestion and allowing surplus renewable energy to be efficiently redistributed where demand is highest.

The investment will also fund vital upgrades at five key Scottish locations, including constructing new substations, reconfiguring overhead lines, and reinforcing transmission cables. These improvements will increase capacity and bolster the grid’s resilience, ensuring it remains robust despite growing energy demands.

Chancellor of the Exchequer, Rachel Reeves, 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 added: "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."

Scottish Secretary Ian Murray said: "This significant investment in Scotland's power grid demonstrates our government's unwavering commitment to becoming a clean energy superpower.

"By expanding grid capacity through these crucial infrastructure projects, we're not only addressing one of our biggest barriers to decarbonisation but positioning Scotland as a powerhouse of Britain's clean energy revolution. 

"The National Wealth Fund's investment in ScottishPower's transmission projects represents our Plan for Change in action - delivering the modern energy infrastructure Scotland and the UK need to thrive in a clean energy future."

John Flint, chief executive at the National Wealth Fund, added: "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."

Keith Anderson, chief executive 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."

NWF’s commitment will help mobilise private finance in support of Iberdrola’s plans to invest £24bn through ScottishPower up to 2028 in the UK’s electricity network and renewable generation infrastructure, which will help ensure the country is on track to meet the Government’s clean power mission.