Prudential has been named as the cornerstone investor in the £1 billion (US$1.6 billion) Swansea tidal lagoon power station project in the UK.
The project involves the development of a six-mile horseshoe shaped sea wall in the bay, creating a lagoon that fills up and depletes with the tide, driving power turbines. The new facilities will have a capacity of 320 MW. It will generate over 495 GWh of electricity every year for 120 years. It will be the first step in the development of a network of coastal lagoons which could generate up to 8% of the UK's electricity needs.
The construction of the power station is scheduled to begin in 2015. The project is scheduled to be operational by 2018.
Prudential's long-term insurance funds will provide about £100 million (US$ million) through its European asset management arm, M&G Investments. In the UK, Prudential currently manages around £25.8 billion of direct infrastructure investments.
Tidjane Thiam, Group Chief Executive, Prudential plc, said:
The financing of this power station is emblematic of the role that Prudential plays in transforming the hard- earned savings of millions of our customers into long-term, productive investment in the UK economy. Such investments provide our customers with strong and sustainable returns, create good jobs and increase productivity and economic competitiveness. Prudential is committed to invest in infrastructure projects that benefit the national economy. We are also proud to play our part in the development of this world-leading renewable energy technology.
Mark Shorrock, Chief Executive, Tidal Lagoon Power Ltd, said:
Securing the backing of a world-renowned investment institution marks another major milestone for the Swansea Bay project and is a clear endorsement of our vision to introduce tidal lagoon infrastructure into the UK's low carbon energy mix. Tidal lagoons will employ British industry to harness a British natural resource and return profits to British institutions.
In late september we reported that Keith Clarke, the former WS Atkins chief, was appointed to lead the project.