German insurance giant Allianz has joined forces with Meridiam of France and Japan鈥檚 Kansai Electric Power to help finance the first direct energy link between the UK and Germany, as both countries seek to shore up their energy security in the wake of the war in Ukraine.
The 拢2.4bn (鈧�2.8bn) NeuConnect project involves building a giant 725km interconnector using subsea cables that will link two of Europe鈥檚 largest energy markets.
Work on the project will begin later this year now that it has full financial backing from a consortium of more than 20 national and international banks and financial institutions including the UK Infrastructure Bank, European Investment Bank, and Japan Bank for International Cooperation.
Once operational in 2028, NeuConnect will enable 1.4GW of electricity to pass in both directions between the UK and Germany.
Those behind NeuConnect have dubbed the privately-financed venture an 鈥渋nvisible energy highway鈥� that will provide enough electricity to power up to 1.5m homes over the life of the project. They claim that the project will help to deliver a more secure and resilient energy supply that will create more than 拢1.7bn in UK consumer benefits over 25 years.
According to NeuConnect鈥檚 backers, the project will deliver a significant reduction in CO2, supporting net zero goals 鈥� by integrating renewable energy sources in the UK and Germany.
To help mark the financial close on what will be the single-largest Anglo-German infrastructure project and an important symbolic link between the two countries, the project鈥檚 investors met with the UK government鈥檚 energy and climate change minister Greg Hands and the German ambassador to the UK Miguel Berger.
Hands said: 鈥淧utin鈥檚 illegal invasion of Ukraine shows it is more important than ever that we strengthen close energy bonds with European partners who are rapidly moving away from using Russian gas.
鈥漌hen it comes online, NeuConnect will open new opportunities for the UK to export clean, and cheaper, renewable energy and reduce our exposure to volatile global fossil fuel prices.鈥�
Secretary of state for international trade Anne-Marie Trevelyan said: 鈥淚nvestment creates jobs and is crucial for helping us meet our climate change targets as we work towards a cleaner, greener future. NeuConnect鈥檚 commitment underlines the huge investor confidence in the UK economy and the strength of working with our European partners on the road to net zero.鈥�
Berger added: 鈥淏oth Germany and the UK aim to accelerate their energy transition and to boost energy security. As a champion in offshore wind the UK is a crucial partner for us as we work towards our common goals. NeuConnect will allow our energy grids to share excess power 鈥� making sure renewable energy is not wasted.鈥�
Christoph Holzer, managing director at Allianz Capital Partners, acting on behalf of Allianz Group, said: 鈥淎s one of the world鈥檚 largest infrastructure investors, we are particularly delighted to have helped develop the project from the outset on behalf of our insurance customers and now, after four years, to bring it to a successful implementation.
鈥滱s a sustainable project that once again underlines the cohesion in Europe regardless of its borders, it will contribute to securing the future energy supply of millions of people with renewable energies.鈥�
Julia Prescot, chair of the NeuConnect board and co-founder of lead investor Meridiam, said: 鈥淒elivering innovative, highly complex projects is in our DNA at Meridiam, so as NeuConnect鈥檚 lead investor, we are proud to reach financial close on one of the world鈥檚 largest interconnector projects - a significant milestone that brings the first direct energy link between the UK and Germany an important step closer.鈥�
Mikio Matsumura, senior executive VP of Kansai Electric Power said: 鈥淎s an organisation, Kansai has set clear and proactive goals, such as those detailed in our 鈥榋ero Carbon 2050鈥� strategy and our 鈥楳edium-term Management Plan鈥�, in order to help lead the global shift toward clean energy and a zero-carbon society.
鈥滷or us, the NeuConnect project represents an invaluable part of this long-term commitment.鈥�
The NeuConnect interconnector will involve building two new substations: one on the Isle of Grain in Kent, England and the other in the Wilhelmshaven region in Lower Saxonia, northern Germany, connected by more than 700km of subsea cables travelling through British, Dutch and German waters.
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