Image credit: NeuConnect
The NeuConnect interconnector project linking the UK and German energy markets has reached financial close.
The €2.8 billion ($2.8 billion) project is led by investors Meridiam and Allianz Capital Partners, as well as Japanese energy company Kansai Electric Power.
NeuConnect is a privately-financed interconnector and reached financial close with a consortium of more than 20 national and international banks, including European Investment Bank (EIB), Bank of China and UK Infrastructure Bank.
Works can now begin later this year with the aim to be fully operational by 2028. Major construction to lay subsea cables and build substations will begin in 2023.
The 725km long interconnector is viewed as an important step towards energy resilience and security of supply, with the subsea cables allowing up to 1.4GW of electricity to flow in either direction.
To mark the project’s financial milestone, NeuConnect’s investors met with the UK Government’s Energy and Climate Change Minister Greg Hands and German Ambassador to the UK Miguel Berger.
Energy and Climate Change Minister Greg Hands said: “ When 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.”
Secretary of State for International Trade Anne-Marie Trevelyan MP said: “Investment creates jobs and is crucial for helping us meet our climate change targets as we work towards a cleaner, greener future. NeuConnect’s 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.”