Australian groups promise to invest 28.5 billion pounds in the UK in the next decade

Australian groups promise to invest 28.5 billion pounds in the UK in the next decade

Australian investors have pledged to spend £ 28.5 billion across the UK on clean energy, technology and infrastructure projects over the next decade, the British government announced on Wednesday.

Boris Johnson, the British Prime Minister, met with leading Australian companies, including financial services company Macquarie Group and the infrastructure fund IFM Investors, to encourage further investment in the UK to help stimulate economic recovery as the pandemic calms down.

£ 28.5 billion consists of a combination of new and previously announced commitments.

Citing a number of wind farms, real estate development and new green infrastructure he said companies wanted to invest in, Johnson said: “This is Global Britain in Action – building new partnerships with friends and allies around the world to create prosperity at home. ”

Australian pension funds have been active investors in the UK for decades in major property and infrastructure projects, including the rebuilding of King’s Cross in London, as well as water, gas and telecommunications.

However, IFM Investors on Wednesday called on the government to do more to attract more foreign capital to the UK.

David Neal, CEO of IFM, has promised to invest £ 3 billion over the next five years in new zero-net projects and upgrade existing IFM assets in the UK, including the M6 ​​toll road and Manchester, Stansted and East Midlands.

But he said IFM and foreign pension funds would be willing to do more if the UK government took more of the risk in infrastructure projects and ceded more control over infrastructure projects in exchange for long-term ownership support from offshore partners.

“The key is to bring this to the private sector in a way that is acceptable and creates a good opportunity for members of our pension funds,” he said. “There’s no point in handing over a capital check if you don’t have an impact on things like construction.”

UK infrastructure investors have been calling for a replacement for the private finance initiative since it was abolished in 2018. But the government has favored a regulated asset base model, used for water companies and airports, to boost private sector investment in new projects such as nuclear power plants.

£ 28.5 billion includes Macquarie’s plans to invest at least £ 12 billion by 2030 in water, wind and gas networks.

The energy and chemicals group Worley has announced that it will expand its business in the UK with more than 1,000 new jobs over the next 18 months. A similar number of roles is promised by renewable energy company Fortescue Future Industries after it bought Williams Advanced Engineering in Oxford this month.

However, Mathew Lawrence, director of the Common Wealth Research Center, argued that the basic infrastructure should be publicly owned. “The record of private investors owning vital UK infrastructure has not been good for consumers, business or the environment,” he said. “Debts have exploded, dividend payments have risen, and the effect is uneven.”

The promises come amid a recent wave of international transactions for UK infrastructure, which provide guaranteed long-term stable income with government support.

National Grid on Sunday sold 60 percent stake in its UK gas transportation business to a consortium of investors in Australia and North America, led by Macquarie. Danish energy company Ørsted on Monday sold a 50 per cent stake in its proposed development of the Hornsea 2 wind farm to French bank Crédit Agricole and insurance company Axa in a £ 3 billion contract.

Macquarie is also competing with private equity group KKR to buy Britain’s largest electricity distributor UK Power Networks from a company controlled by the family of Hong Kong billionaire Lee.

Additional reporting by Chris Flood

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