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National Grid announces £7bn fundraise to power network upgrades

Pa
Friday, May 24, 2024

LONDON: National Grid is to raise £7 billion from investors as part of a plan to double spending on the electricity network over the next five years.

The London-listed firm, which runs much of Britain’s electricity grid, plans to invest about £60 billion in networks before the end of the decade, with more than £30 billion of that going to England, Scotland and Wales.

John Pettigrew, National Grid’s chief executive, said the spending will support an extra 60,000 jobs in Britain. He said: “Today is a defining moment for National Grid as we announce a significant increase in investment that cements our position as a leader in the energy transition on both sides of the Atlantic.

“Governments and regulators are moving with increased urgency to attract the levels of investment required to meet their net zero ambitions, giving us improved visibility and confidence over our medium-term investment plan.

“This is an unprecedented time for our industry that is creating significant opportunities for National Grid today, over the next five years and for decades to come.”The investment comes against a backdrop of fast-growing demands on Britain’s electricity network as the region transitions to renewable energy.

Last year, research by the International Energy Agency (IEA) found that engineers will need to roll out 600,000km of electric cabling before 2040 to help meet growing electricity demands.National Grid plans to raise the money via a rights issue, where a company invites existing shareholders to purchase new shares in it. Investors will have the option to buy seven new shares at a discount of roughly a third, for every 24 shares that they own.

As a result, National Grid shares fell 8 per cent in Thursday morning trading.The energy giant is also selling off parts of its portfolio to help fund its investment plans.The transmission giant said it will sell its UK liquid natural gas asset, Grain LNG, and its US onshore renewable business, National Grid Renewables.Separately, National Grid’s financial results for last year showed a decline in profits by 15 per cent to £3.05 billion.