Fund raise from existing shareholders aims to help catalyse broader £32bn green grid investment programme
National Grid has this morning launched a £7bn capital raise to fund a major programme of electricity network upgrades that can prepare the electricity grid for the accelerating roll out of renewables and clean technologies.
Announcing the plan yesterday, the company said the new funds would enable it to press ahead with a major £60bn investment programme to upgrade and expand electricity networks over the next five years.
National Grid said 52 per cent of the investment would be focused on the UK, with the rest spent in the US, where it operates transmission facilities in New York, Massachusetts, New Hampshire, and Vermont.
National Grid said its £60bn 'Grid for Growth' plan - which covers the period between 2024 and 2029 - marked a doubling of investment on the previous five year period, and represented a "huge growth opportunity" that would bring "significant benefits for the whole country".
In a video shared on the group's website, CEO John Pettigrew called the £60bn investment plan "unprecedented in its scale and ambition".
"As economies become increasingly digital, electrified and decarbonised, the need for energy infrastructure has rarely been more pressing," he said. "Our investment will unlock significant economic growth and, by the end of the decade, National Grid is expected to support over 60,000 more jobs, while also decarbonising our energy systems, bolstering security of supply, and reducing consumer bills in the long term."
The company has invited its existing shareholders to purchase new shares in the company with a total value of £6.8bn as it launched a fully underwritten rights issue on the London Stock Exchange.
The transaction marks the largest rights issue of the last 15 years in Europe, outside the banking sector, National Grid said.
Of the total £60bn investment planned for between 2024 and 2029, £23bn is earmarked for upgrading and expanding electricity transmission in the UK to help the grid accommodate more clean energy capacity.
A further £8bn will go towards National Grid's distribution business, which will invest in infrastructure that will enable the faster adoption of low-carbon domestic technologies such as heat pumps and electric vehicles.
Funds for the investment programme will also be raised from borrowing and by offloading assets and parts of the business, according to reports.
Grid infrastructure continues to be a major constraint on the growth of renewables in the UK, with some project developers reporting waiting times for grid connections of over a decade.
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