Private equity firm STAR Capital Partners and Eurotunnel, the operator of the Channel Tunnel rail link between England and France, have formed a joint venture to build a cross-border electricity interconnector between the UK and France, the two firms have announced.
The joint venture – 51 percent owned by STAR Capital and 49 percent by Eurotunnel – will build a twin cable 500-megawatt direct current interconnector, to be installed inside the Channel Tunnel and running over 75 kilometres. The project is expected to cost around €250 million and should boost cross-Channel electricity capacity by 25 percent.
“The consumption of electricity is on the increase in both Britain and France and price differences exist between the two countries depending upon the time of day. This project aims to smooth the increase in these electricity imbalances,” the partners explained in a statement.
Cross-border energy infrastructure is a prominent goal of the European Union’s €1 trillion energy plans for the decade to 2020. The European Commission wrote in a report last year that “developing the huge renewables potential in Southern Europe and North Africa will be impossible without additional interconnections within the EU and with neighbouring countries”.
STAR Capital, which runs an investment fund with €1 billion of assets under management, is no stranger to infrastructure, having recently acquired Eversholt Rail Group, a rolling stock company formerly owned by HSBC Holdings, together with 3i Infrastructure and Morgan Stanley Infrastructure Partners for £2.1 billion (€2.4 billion; $3.4 billion).