Swansea Tidal Lagoon: Funders rally to save £1.2bn project


A £15bn pension fund has pledged to support the construction of Swansea Bay Tidal Lagoon, becoming the latest high-profile backer of the scheme amid reports it is set to be scrapped.

The Wales Pension Partnership, which is made up of funds from workers across eight Welsh local authorities, said it would be writing to the Welsh and UK governments to confirm its backing for the £1.2bn scheme.

Speaking to Wales Online, WPP chairman Mark Norris said: “The Swansea Bay Tidal Lagoon offers WPP a rare opportunity to invest in a significant infrastructure project right on our own doorstep.

“Our pensioners would benefit from the stable, consistent returns that the project offers – just what our funds are looking for.

“Of course, as Swansea is a pathfinder project, it could be the first of other investment opportunities in Wales.”

The pension fund becomes the latest backer to offer financial support for the Swansea Bay scheme in recent weeks.

Earlier this month, first minister Carwyn Jones said the Welsh Government would provide £200m in funding to ensure the Swansea Bay Tidal Lagoon was built.

The pledges come as reports suggest the UK government is set to scrap the project over cost concerns.

Sources have told Construction News that an announcement on the future of Swansea Bay is expected next week from the Department of Business Energy and Industrial Strategy (BEIS).

Fielding questions from MPs on Wednesday, Welsh secretary Alun Cairns said he would like to see the tidal lagoon go ahead but it would have to prove it was value for money for the taxpayer.

He added: “We’re still looking at the numbers – we’re doing anything and everything possible to try to make this fit.”

Last year former energy minister Charles Hendry published a report calling on the government to back Swansea Bay as a pathfinder project.

BEIS and Swansea Bay developer Tidal Lagoon Power have been unable to agree on a suitable strike price – the money the government pays for each unit of energy produced.

Swansea Council leader Rob Stewart said the decision by the WPP to back the scheme was “fantastic news” and could be a “game-changer”.

He said: “It is an indicator that they will invest in the scheme should the Westminster government give the project the green light.

“Of course, any evaluation and decision they take would not be political; it would be based on sound professional financial advice by pension fund experts.”

Latest reports suggest that Tidal Lagoon Power’s current strike price offer stands at £89.90 per MWh over a 90-year period.

Hinkley Point C’s strike price is £92.50 per MWh across 35 years.

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