Lloyds pledges £1bn to UK infra

The bank, in which the UK government owns a 41% stake, said it will channel the funds to projects that form part of the government’s infrastructure plan in areas including energy, transportation and other core infrastructure.

Lloyds Banking Group, in which the UK government owns a 41 percent stake, announced today that it was ready to lend up to £1 billion (€1.3 billion; $1.6 billion) to UK infrastructure projects.

“The pledge to provide an additional £1 billion for UK infrastructure projects demonstrates our commitment to supporting economic growth, as this additional finance will deliver two key benefits to the UK economy,” Chris Heathcote, managing director and global head of project finance said in a statement.

“In the short term, new infrastructure projects create and protect jobs in the construction industry, whilst in the longer term they also improve the ability of businesses to operate in the UK and to do so more efficiently. By providing this additional finance now, during the current economic cycle, vital projects can secure the financing required to progress so that the UK’s infrastructure is ready for when growth returns,” he added.  

Targeted sectors include renewable energy, electricity generation, ports, highway development and other core infrastructure projects outlined in the UK government's £250 billion, decade-long infrastructure plan.

Lloyds has been one of the most active lenders in the UK and Continental European project finance landscape throughout 2011 and 2012.

Recently, it served as lead structuring bank, together with Bank of Tokyo Mitsubishi, Mizuho and HSBC for a £2.6 billion rolling stock public-private partnership (PPP) that is part of the Intercity Express Programme (IEP). Under the PPP contract, Japan’s Hitcachi will deliver and maintain 57 trains for the Great Western Main Line operating out of London’s Paddington station in addition to providing three maintenance depots. 

Mitsubishi UFJ Trust and Banking, Sumitomo Mitsui Trust Bank, SMBC, the European Investment Bank, Development Bank of Japan, and the Japan Bank for International Cooperation were also part of the lending group for the IEP project. 

Lloyds said it lent £108 million to the rolling stock PPP project.

Throughout 2011, Lloyds helped structure financing for 26 large-scale projects including the Pennant Walters Wind Farm, ABP Ports and the Croydon & Lewisham Lighting Project Finance Initiative (PFI) contract. In all, the bank lent close to a £1 billion to various project finance projects.