PIC tackles water challenge with £50m reservoir investment
Pardon the Interruption
This article is just an example of the content available to mallowstreet members.
On average over 150 pieces of new content are published from across the industry per month on mallowstreet. Members get access to the latest developments, industry views and a range of in-depth research.
All the content on mallowstreet is accredited for CPD by the PMI and is available to trustees for free.
Pension Insurance Corporation has invested £50m in utility firm Portsmouth Water to fund the construction of the Havant Thicket Reservoir, the first reservoir to be built in the UK since the 1990s.
Situated in southern Hampshire, the reservoir is intended to address the “significant water resource challenge” in the South East of England and protect Hampshire’s rare chalk streams.
The reservoir is expected to take six years to design, construct and commission. It will then enable supply of up to 21m litres of water per day to Southern Water.
The investment comes in a form of a £50m consumer price index-linked senior debt in Portsmouth Water, which matures in 2037, wrapped by Assured Guaranty. PIC said the investment provides a good match for its pension liabilities.
Thomas Foucoin, senior debt origination manager at PIC, said: “This is a major infrastructure project which will play a critical role in ensuring adequate water supply to local communities across the South East of England, and aligns well with PIC’s own values and purpose.”
PIC’s £50m debt forms part of a wider £325m investment Portsmouth Water had secured in order to build the reservoir. Other companies supporting the project include ING, Lloyds Bank, NatWest, Abrdn, Assured Guaranty and Siemens Financial Services through Siemens Bank.
Bob Taylor, chief executive officer for Portsmouth Water, said: “This is an exciting time for the project. We have recently taken a major step forward in awarding the main reservoir works contract and, with all capital and investment now secured, look forward to work progressing on site.”
PIC has provided roughly £5bn of financing to greenfield and brownfield infrastructure projects, as well as corporate borrowers, in the past five years.
Centrus acted as advisers on the transaction. Linklaters represented PIC.
How difficult is it to find infrastructure projects to match insurers’ liabilities in the UK?