Financial services giant Prudential will invest £100m into the proposed Swansea Bay tidal lagoon energy project.
The firm will become the cornerstone investor for the £1bn scheme, which will become the world’s largest tidal energy provider when it opens in 2018 generating over 495GWh of electricity a year for 120 years – enough to provide nearly all of the domestic electricity for the Swansea Bay region.
The deal forms part of Prudential’s commitment to a joint deal with five other major UK insurance companies to invest a total of £25bn in the UK’s infrastructure over the next four years. The funding will come from the company’ European asset management arm, M&G Investments.
Tidjane Thiam, Prudential’s group chief executive, 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.”
The Swansea Bay project is the first step in what developer Tidal Lagoon Power hopes will become a network of coastal lagoons which could generate up to 8 per cent of the UK’s electricity needs. The construction of the power station is scheduled to begin in 2015 and will create almost 2,000 jobs.
Mark Shorrock, chief executive of Tidal Lagoon Power, 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.”
The Swansea Bay lagoon will consist of a 9.5km sand-core breakwater or rock bund with an array of 7m turbines mounted inside concrete housings at the mouth of the enclosure, which will be driven by the flow of water in and out of the lagoon as the tide ebbs and flows four times a day.
The 320MW plant will be capable of generating for 14 hours a day thanks to the roughly 100,000 Olympic swimming worth of water that will pass through the plants turbines every 24 hours.