The National Wealth Fund (NWF) has announced a significant £600 million commitment to support Iberdrola and its UK subsidiary, ScottishPower, in upgrading the British electricity grid.

This investment is aimed at paving the way for increased clean electricity capacity and is expected to support hundreds of jobs.

The NWF's contribution forms part of a larger £1.35 billion financing package. This broader package, led by Bank of America as Sole Debt Arranger, also includes participation from BankInter, BNP Paribas, Caixabank, Lloyds Bank, NatWest, and Banco Sabadell. The funding will specifically support the delivery of seven of ScottishPower's priority transmission grid upgrade projects. These projects are designed to facilitate a greater integration of renewable energy, reduce electricity constraint costs, lower energy prices for businesses and consumers, and stimulate economic growth across the UK.

The investment addresses the substantial need for grid upgrades to meet the UK Government's Clean Power 2030 Action Plan. The National Energy System Operator (NESO) estimates that up to £60 billion of investment is required by 2030 to support the transition to a clean power system.

Chancellor of the Exchequer, Rachel Reeves, commented: "Upgrading our energy infrastructure is good news for businesses, households, and the economy. It will bring down bills, put more money in working people's pockets and enable businesses to expand. That is why I am so pleased to see the National Wealth Fund securing deals such as this. This is our Plan for Change in action, delivering long term economic growth and the jobs of the future whilst making Britain a clean energy superpower."

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Energy Secretary Ed Miliband added: "We need to get Britain building so we can deliver on our Plan for Change to protect billpayers, unleash growth and create jobs. This investment will help to deliver clean power by 2030 by speeding up grid upgrades – bringing cheaper, homegrown renewable power into homes and businesses, while supporting skilled jobs across the country."

The NWF's investment will specifically support ScottishPower's development of the Eastern Green Link (EGL) projects 1 and 4. These interconnectors, running from Scotland to the North-East of England and Norfolk, are crucial for transporting clean energy from generation sources to areas of demand. NESO has identified EGL1 as a critical project for achieving the government's 2030 clean power ambitions, as it will address significant transmission constraints.

Additionally, the financing will facilitate grid upgrades in five key locations across Scotland, including the construction of new substations, reconfiguration of overhead lines, and improvements to overhead transmission cables to boost capacity and resilience.

Keith Anderson, CEO of ScottishPower, said: "Today's announcement is a welcome step forward in the delivery of the Government's Clean Power 2030 pathway. Working together to drive forward these critical investments is an important catalyst for economic growth, as we make progress in bringing more renewables onto the system to meet the increasing demand for electrification."

Scottish Secretary Ian Murray stated: "This significant investment in Scotland's power grid demonstrates our government's unwavering commitment to becoming a clean energy superpower. By expanding grid capacity through these crucial infrastructure projects, we're not only addressing one of our biggest barriers to decarbonisation but positioning Scotland as a powerhouse of Britain's clean energy revolution."

John Flint, CEO at National Wealth Fund, remarked: "Upgrading the power grid is one of the most significant barriers to decarbonising our economy, and the scale of investment needed to address this challenge is substantial. Our financing will support some of the most vital grid upgrades that will have a major impact on the transition to a renewables-based electricity system and help address the grid constraints that make electricity more expensive for businesses and consumers."

Bernard Mensah, President of International at Bank of America, added: "Bank of America is pleased to partner with the National Wealth Fund on this significant investment. This innovative, tailored co-lending structure will help support Scottish Power with boosting both UK grid capacity and connectivity."

This commitment from the NWF is expected to help mobilise further private finance to support Iberdrola's broader plan to invest £24 billion through ScottishPower in the UK's electricity network and renewable generation infrastructure by 2028.