National Wealth Fund Commits £600 Million to ScottishPower to Modernize UK Electricity Grid and Accelerate Clean Energy Transition
In a landmark move to modernize the UK’s aging power infrastructure and catalyze its transition to a cleaner energy future, the National Wealth Fund (NWF) has pledged a substantial £600 million investment into ScottishPower, the UK subsidiary of Spanish energy giant Iberdrola. This financial commitment, unveiled today, marks a pivotal step toward fortifying the nation’s power grid while creating hundreds of new jobs and contributing to the UK’s long-term energy security and climate goals.
This significant investment from the NWF is part of a broader €1.6 billion (£1.37 billion) financing package orchestrated by Bank of America, acting as the Sole Debt Arranger. The funding consortium comprises a coalition of major international and domestic financial institutions, including Bankinter, BNP Paribas, Caixabank, Lloyds Bank, NatWest, and Banco Sabadell. Together, these lenders are channeling capital into one of the most critical infrastructure undertakings in the UK energy sector in recent years.
Accelerating the Clean Power Transition
The capital infusion from the NWF will be directed specifically toward the swift implementation of seven high-priority transmission grid upgrade projects identified by ScottishPower. These projects are strategically designed to enable a more robust and flexible electricity network capable of accommodating a growing influx of renewable energy, particularly wind and solar power. With the UK government targeting a fully decarbonized electricity system by 2035—and aiming for 95% clean power by 2030 under its Clean Power 2030 Action Plan—strengthening the transmission grid is essential to achieving these goals.
Currently, one of the major challenges to the UK’s energy transition lies not in the generation of renewable power, which is growing rapidly, but in the ability to transport it efficiently from generation sites—often in remote coastal or rural regions—to urban and industrial centers where demand is highest. The existing grid infrastructure, in many cases, lacks the capacity and flexibility to handle this shift in generation patterns. The upgrades enabled by this investment will directly address these bottlenecks.
By increasing grid capacity and resilience, these projects will also reduce congestion charges—costs that arise when the grid is unable to efficiently transmit power, leading to curtailments of renewable generation and reliance on more expensive backup sources. Ultimately, this will help lower electricity costs for households and businesses alike, contributing to economic competitiveness and consumer relief during a period of persistently high energy prices.
Economic and Employment Benefits
The NWF’s commitment is not just a vote of confidence in ScottishPower and the broader UK energy sector—it is also a strategic investment in job creation and regional economic development. The transmission upgrade projects supported by this financing are expected to create and sustain hundreds of skilled jobs across the country. These range from engineering and construction roles to planning, project management, and supply chain opportunities.
Many of the infrastructure improvements will take place in areas that are key to the UK’s green energy future, such as Scotland and northern England, where wind energy potential is especially high. By upgrading transmission networks in these regions, the investment helps bridge the divide between renewable-rich areas and electricity demand centers, unlocking clean energy generation that would otherwise remain untapped.
This regional impact aligns with the UK government’s broader objectives of “levelling up” and ensuring that the benefits of the green transition are distributed equitably across the country. It also helps establish a strong foundation for the growth of clean energy clusters and the development of future-facing industries in these regions.
Strategic National Imperative
The scale of investment needed to achieve the UK’s clean electricity targets is immense. According to the National Energy System Operator (NESO)—formerly part of National Grid ESO—in its independent guidance to the government, over €70 billion (approximately £60 billion) in investment will be necessary by 2030 to develop the transmission and distribution infrastructure required to support a fully decarbonized power system. This includes not only physical assets such as substations, high-voltage lines, and transformers but also the digital infrastructure and smart grid capabilities needed to manage a dynamic and decentralized energy system.
By contributing a significant portion of capital toward this broader investment need, the National Wealth Fund is helping to de-risk private sector involvement and accelerate timelines for infrastructure delivery. As a publicly-backed fund, the NWF’s participation sends a powerful signal to the market, encouraging further investment and underscoring the government’s commitment to delivering a reliable, low-carbon energy future.
The NWF’s strategic involvement in infrastructure and energy transition projects is part of a broader remit that includes boosting national resilience, enabling decarbonization, and fostering technological innovation. This investment in ScottishPower represents the fund’s ongoing role as a cornerstone of the UK’s green industrial strategy.
A Shared Vision for the Future
ScottishPower, a long-standing leader in the UK’s renewable energy space, welcomed the funding as a critical enabler of its ambitious plans. The company has been at the forefront of wind power development in the UK and has consistently advocated for increased grid investment to support the next phase of the energy transition.
“This partnership with the National Wealth Fund and a consortium of leading financial institutions is more than just a financial milestone—it’s a shared commitment to building the infrastructure the UK needs to lead in clean energy,” said Keith Anderson, CEO of ScottishPower. “With this support, we can move faster to connect renewable power to the grid, lower costs for consumers, and help the UK meet its climate obligations.”
Iberdrola, ScottishPower’s parent company, is one of the largest clean energy companies in the world and has made significant investments in the UK market over the past two decades. The company’s global strategy prioritizes clean electricity networks as a critical area for investment, particularly in markets like the UK where regulatory frameworks and public investment support long-term infrastructure development.
The announcement comes at a critical juncture in the UK’s energy landscape. With increasing volatility in global fossil fuel markets, growing electricity demand driven by electrification (especially in transport and heating), and ambitious climate targets on the horizon, ensuring the resilience and sustainability of the power grid is an urgent national priority.
In this context, the partnership between the National Wealth Fund and ScottishPower represents a proactive, forward-looking response to some of the country’s most pressing energy challenges. By mobilizing public and private capital together, this investment lays the groundwork for a smarter, cleaner, and more affordable energy future.
As the UK progresses toward its Clean Power 2030 goals, further investments of this kind will be essential—not only to upgrade physical infrastructure but to transform the entire energy ecosystem. This will include continued expansion of renewable generation capacity, the integration of energy storage and demand flexibility, and the digitalization of grid operations.
