The European Investment Bank (EIB) yesterday signed a loan of GBP 360 million with National Grid to support the company’s investment programme for the upgrade and extension of its four gas distribution networks in the UK.
The EIB loan will help to ensure the security, safety and reliability of National Grid’s gas distribution network which supplies gas to over 11 million customers in north London, the east midlands, the west midlands and the north west of England. The improvements will allow the company to maintain standards of service to existing customers and will facilitate the extension of capacity to provide for the growing customer-base.
Simon Brooks, EIB Vice President responsible for lending operations in the UK, said, “The EIB is delighted to support National Grid’s investment programme which will have a positive impact on the security of the supply of energy in the UK. Moreover, the Bank is confident that by undertaking these necessary improvements, National Grid will be able to reach an even greater number of UK customers, ensuring that gas will replace less efficient and more polluting sources of energy in domestic, commercial and industrial environments. This project, therefore, not only helps to promote the all-important EU objectives of rational use of energy and environmental protection but also is in line with the strict regulations imposed upon the sector by the UK regulator - OFGEM.”
The EIB-funded investment programme which National Grid is undertaking covers the three years to 31 March 2011. The bulk of the programme concerns the replacement of cast iron pipes with new polyethylene pipes which are more resistant and reliable. In addition, National Grid will use the EIB funds to implement reinforcement works across the 132,000km long pipeline network.
Environmental benefits resulting from the project are expected to be considerable, as the planned works should lead to a reduction in shrinkage - gas consumed within or lost from the transporter’s system.
National Grid has also committed to producing full studies of the impact of the investment programme on biodiversity and natural habitats. The EIB loan is conditional on National Grid’s compliance to EU directives across this wide-reaching range of environmental factors.
Background notes:
The EIB in the UK
The European Investment Bank (EIB) is the European Union’s long-term financing institution which supports projects promoting European objectives. The EIB made its first loan in the UK in 1973 and since then the EIB has lent almost EUR 70 billion to support the UK economy. In the five years from 2004 to 2008 alone, the EIB financed key investment in the UK to the tune of EUR 18.9 billion (GBP 13.3 billion).
In 2008 alone the Bank allocated EUR 3.8 billion (GBP 3 billion) for UK projects ranging from investment helping UK regional development, to protecting the environment, promoting clean and secure energy sources, improving education facilities, promoting the development of national and regional transport, and supporting the activities of small and medium sized enterprises. Financing in the UK accounted for over 7% of the EIB’s overall EU lending in 2008.