Allianz plots 26.2% purchase of 1.4GW interconnector

The German group will join Meridiam as an owner of the NeuConnect project, which recently received regulatory approval.

Allianz Capital Partners is poised to acquire a 26.2 percent stake in a 1.4GW interconnector, set to be the first such link between the UK and Germany.

The group’s purchase is currently being processed by Germany’s market regulator and approval will see Allianz join the NeuConnect consortium, which is led by French fund manager Meridiam and contains British power operator Frontier Power and Greenage. The 650km link will transfer wind power generated by the two countries.

The NeuConnect project is valued at about £1.3 billion ($1.8 billion; €1.5 billion) and Allianz’s decision to invest has come after UK regulator Ofgem’s decision to approve the project last month, following a six-month consultation period. The consortium hailed the decision as a “significant milestone” for NeuConnect after Ofgem said the link, alongside two others, is “likely to be in the interests of British consumers”.

Ofgem also approved GridLink, a 1.4GW facility between the UK and France wholly owned by iCON Infrastructure Partners III fund, in addition to NorthConnect, another 1.4GW project between Scotland and Norway being developed by utility quartet Agder Energi, Lyse, E-CO and Vattenfall.

The move would be Allianz’s first involvement in an interconnector project, with the link slated for delivery in 2022. It holds stakes in several gas pipelines in the UK, Romania, Czech Republic, Austria and Norway, with the latter two also exporting gas to other nearby countries. It would also be a significant greenfield move for the firm, which tends to – although not exclusively – target brownfield assets.