Pension and insurance firms have voiced support for a public-private blended finance model designed to mitigate investment risks and drive billions in private finance into environmentally friendly infrastructure. This initiative follows the ABI’s Investment Delivery Forum’s (the Forum) announcement of a 10-point action plan for investment, which includes the design of a novel funding model to stimulate private investment in the UK’s critical infrastructure.
A new funding model for EV charging networks
The Forum’s plan emphasises the creation of a national EV-charging network. Developed in collaboration with the Green Finance Institute (GFI) and His Majesty’s Treasury’s blended finance team, the funding model aims to leverage public investment to catalyse substantial private investment.
“Public support would be used to mitigate the initial risk in new infrastructure that private investors are unable to take,” explains Rhian Mari-Thomas, chief executive officer of the GFI. The report estimates that less than £1 billion of public investment over 15 years could spur up to £20 billion of private investment in the EV charging network, fostering economic growth and addressing the current lack of EV infrastructure in remote locations.
Expanding investment horizons
Beyond EV charging networks, the Forum’s action plan includes a focus on nuclear energy and offshore wind investments. The Forum, comprising some of the UK’s largest pension firms and insurers, aims to unlock £100 billion for productive assets over the next decade through the reformation of the Solvency II regime.
“The work done by the Forum on new funding models, such as the EV charge point programme, is essential to facilitate the flow of private capital into the green infrastructure transition,” states Baroness Nicky Morgan, chair of the Investment Delivery Forum.
Regional and technological expansion
The Forum’s report also outlines plans for broader regional engagement. Initially focused on Manchester and the north west, the engagement strategy will expand to West Yorkshire, Liverpool, Wales, and Scotland by 2024/25. This expansion aligns with the Forum’s commitment to channel £100 billion into productive assets, as highlighted by Hannah Gurga, director general of the Association of British Insurers: “The Investment Delivery Forum has laid firm foundations for the industry to act on the opportunity that reforming the regulatory framework brings.”
The Forum will also explore investments in emerging technologies like carbon capture and small nuclear reactors. These initiatives align with longer-term aims to invest in floating offshore wind projects and enhance the UK’s energy infrastructure.