IFM Investors, a global institutional investment manager owned by Australian superannuation funds, is to sign a Memorandum of Understanding (MoU) with the UK government to invest £10bn in the country by 2027.
The deal comes as UK Prime Minister Rishi Sunak unveiled £29.5bn of new investment across various sectors, as the world’s leading chief executives and investors arrived at the Global Investment Summit at Hampton Court Palace.
IFM’s MoU with the Department for Business and Trade aims to drive the former’s investment in the country across large-scale infrastructure and energy transition projects by working with London to identify commercially viable opportunities.
The MoU is an increase on IFM’s commitment in 2022 to invest £3bn in its UK-based infrastructure portfolio assets, which it is on track to meet it said.
The deal will be signed at the Global Investment Summit 2023 in London between IFM Investors and the Minister for Investment Lord Johnson at Hampton Court Palace.
“This £10bn commitment from IFM Investors is a very important investment for the UK’s innovative energy and infrastructure sectors,” said UK Business & Trade Secretary Kemi Badenoch.
“The increasing flows of new capital into our country, combined with the forthcoming Global Investment Summit, show how the UK is fast becoming the most exciting and innovative place in the world to invest.”
IFM Investors chief executive David Neal said: “Australia’s ‘super funds’ system can be a trusted long-term partner with the United Kingdom.
“We’re proud to sign this MoU with the UK government, which is a signal of the confidence IFM and Australian super funds have in the UK as a place to invest.
“Our presence in the UK continues to grow and we look forward to working closely with the government to drive investment into large-scale infrastructure and energy transition projects across equity and debt funding.
“Partnerships between governments and long-term investors are necessary to unlock the potential of pension funds to invest to help mitigate system-level risks such as climate change.”
Also at the summit, ScottishPower parent company Iberdrola set out its £12bn investment plan for 2024-2028 in the UK, providing further details of its blueprint focused on electricity networks and renewables.
Iberdrola Executive Chairman Ignacio Galán said: “Iberdrola is proud to play our part in supporting the UK’s leadership position on decarbonisation.
“Over the past 15 years, we have invested close to £30bn in bringing the benefits of greener and more secure energy to the UK.
“Backed by clear regulatory and policy frameworks, we are as committed as ever to speeding up our investments in the UK’s electricity grid and renewables generation.”
With more than £2bn invested in the country as part of its previously announced £6.7bn programme for the years 2023-25, the company said it plans to build on this with investments of over £7bn more in the years 2026-28. This amounts to a £12bn programme for 2024-28.
Around two-thirds of the money will be dedicated to transmission and distribution electricity networks, driven by regulatory arrangements in place (RIIO T2 and RIIO ED2), as well as projects like the £2.7bn Eastern Green Link 1 subsea transmission cable, which received regulatory approval this month.
Iberdrola announced it will continue investing in its East Anglia 3 offshore wind farm, as well as in onshore wind and solar projects, energy retail and green hydrogen.
These investments could be further increased with additional offshore wind opportunities, like East Anglia 1 North and East Anglia 2, which the company has ready for upcoming auctions it added.
The summit will be opened by the Prime Minister and Business & Trade Secretary Kemi Badenoch, with chief executives in attendance including Blackstone’s Stephen Schwarzman, Aviva’s Amanda Blanc, Goldman Sachs’ David Soloman and JP Morgan Chase’s Jamie Dimon.
Barclays, HSBC and Lloyds Bank will also attend as Principal Partners of the Summit, which will celebrate “British Ideas – Past, Present and Future”, from the steam train to quantum computing. It will be followed by a reception at Buckingham Palace hosted by King Charles.