Boris Johnson and Angela Merkel outline support for first ever UK-German energy link as global investors commit to deliver £1.4bn NeuConnect project
- New interconnector will connect UK and German electricity markets for first time, delivering significant carbon reductions and consumer benefits
- NeuConnect project reaches key milestones as new German laws are passed and UK licence is secured
Plans to connect the UK and German energy markets for the first time received a significant boost today, with UK Prime Minister Boris Johnson and German Chancellor Angela Merkel outlining their support for the NeuConnect project, and NeuConnect’s global investors reiterating their firm commitment to deliver the vital new energy link between two of Europe’s largest energy markets.
Led by global investors Meridiam, Allianz Capital Partners and Kansai Electric Power, NeuConnect is a £1.4bn privately-financed interconnector that will create the first direct link between UK and German electricity networks, helping deliver a more resilient and sustainable electricity supply, while also helping to lower costs for consumers.
As part of today’s visit to the UK by German Chancellor Angela Merkel to meet with UK Prime Minister Boris Johnson, the two leaders will speak of the NeuConnect project with the Prime Minister’s official statement saying:
Collaboration between the UK and Germany is already helping tackle some of the greatest challenges of our time, including defeating the coronavirus pandemic and tackling climate change, and today the Prime Minister and Chancellor Merkel will reaffirm the importance of that work.
This includes support for ‘NeuConnect’, a new electricity interconnector that will create an energy highway between the UK and Germany. NeuConnect is the largest UK-German investment project currently underway and will allow our energy grids to share excess power – making sure renewable energy is not wasted and helping both our economies decarbonise more rapidly.Extract from Prime Minister's official statement
Welcoming their support for the project, Chair of the NeuConnect Board and Partner at lead investor Meridiam Julia Prescot said:
The UK and Germany share a common goal in delivering greener, cleaner and more resilient infrastructure so we welcome this support for NeuConnect and are delighted to commit to deliver this vital new energy link. Despite the challenging times, NeuConnect continues to make strong progress, keeping us on track to reach financial close in the Autumn and begin major construction work next year.Julia Prescot, Chair of NeuConnect Board and Partner at lead investor Meridiam
By integrating renewable energy sources in Germany and the UK, NeuConnect will allow 1.4GW of electricity to flow in either direction, helping to deliver:
- A significant reduction in CO2, supporting net zero goals – By integrating renewable energy sources in Germany and the UK, NeuConnect will deliver a netreduction in carbon emissions of 16 MtCO2 over 25 years – the equivalent of planting 28 million new trees or removing 400,000 cars off the road in a year
- Greater energy security and huge consumer benefits – Over 700km of subsea cables will form an ‘invisible highway’ to allow 1.4GW of electricity to flow in either direction, helping to deliver a more resilient energy supply in the UK and Germany; supporting each country’s renewable energy growth ambitions; and delivering over £3bn of consumer benefits
- The single-largest Anglo-German investment project and an important symbolic link – Along with creating an important new piece of energy infrastructure, NeuConnect is currently the single largest Anglo-German investment project and will represent an important symbolic link between the British and German economies
NeuConnect’s investors today confirmed their renewed commitment to deliver the project following a period of significant progress and key milestones including:
- New energy legislation passed in Germany under which NeuConnect will operate
- NeuConnect’s updated UK interconnector licence confirmed by energy regulator Ofgem
- A major £1bn procurement programme nearing completion
- NeuConnect targeting financial close in September which would allow initial works to begin later this year followed by major construction works starting in 2022
Meridiam was founded in 2005 by Thierry Déau, with the belief that the alignment of interests between the public and private sector can provide critical solutions to the collective needs of communities. Meridiam is an independent investment Benefit Corporation under French law and an asset manager. The firm specializes in the development, financing, and long-term management of sustainable public infrastructure in three core sectors: mobility, energy transition and environment, and social infrastructure. With offices in, Addis Ababa, Amman, Dakar, Istanbul, New York, Luxembourg, Paris, Toronto and Vienna, Meridiam currently manages US$10 billion and more than 90 projects and assets to date. Meridiam is certified ISO 9001: 2015, Advanced Sustainability Rating by VigeoEiris (Moody’s) and applies a proprietary methodology in relation to ESG and impact based on United Nations’ Sustainable Development Goals (SDGs). www.meridiam.com
About Allianz Capital Partners
Allianz Capital Partners is one of Allianz Group’s asset managers for alternative equity investments and is part of Allianz Global Investors. With offices in Munich, London, Luxembourg, New York and Singapore, Allianz Capital Partners manages over EUR 41 billion of alternative assets*. Our investment focus is on private equity, infrastructure and renewable energy. Our investment strategy is targeted to generate attractive, long-term and stable returns for our clients. *Data as at 31 March 2021
About Kansai Electric Power
Kansai Electric Power Company Inc. (Kansai) was established in 1951 and the second largest electric power utility in Japan which delivers electricity to Osaka and surrounding prefectures. Kansai owns vertically integrated electric power system including generation of nuclear, hydropower and thermal, transmission and distribution, with consolidated total assets of c. USD 72B. Kansai expands its overseas electric power business as well as diversifying into Gas and communication business in Japan. Kansai announced its Zero Carbon Vision 2050 in 2021 to commit zero carbon emissions and create hydrogen-based society in 2050.