New investors take 50% stake in Electricity North West

UK investment firm Equitix and a new consortium led by the Japanese utility Kansai Electric Power Company have purchased a combined 50 per cent share in Electricity North West for an undisclosed sum.

The stake in the distribution network operator, which serves 5 million customers across the north west of England, was acquired from JP Morgan Asset Management and First State Investments. They will continue to hold the remaining 50 per cent of the business.

John Roberts, chair of Electricity North West, said: “We are a high performing organisation and I’m delighted that First State Investments and JP Morgan Asset Management are showing ongoing confidence in and commitment to our company.

“I’m also delighted to welcome the addition of the Kansai-led consortium and Equitix and look forward to working closely with them.”

Equitix chief investment officer Hugh Crossley said: “We are excited to partner with Kansai to acquire this stake in Electricity North West.

“Our partnership brings strong strategic and asset management expertise which will help fuel growth and sustained outperformance for one of the UK’s premier distribution network operators, while providing a great service for customers.”

Hiroshi Nakajima, managing executive offer for the international business and cooperation division at Kansai Electric Power Company, commented: “This is the first case of Japanese electric utility companies entering into an overseas major electricity distribution network operator business.

“We aim to develop a long term and strategic collaboration with Electricity North West to create solutions to proactively address the current challenges to distribution networks which include smart cities, electric vehicles and virtual power.”

The Kansai-led consortium also includes the Japanese investors Daiwa Energy & Infrastructure Company and Mitsubishi UFJ Lease & Finance Company (MUL).

MUL already owns a 44.9 per cent in South Staffordshire Water, having acquired a 25 per cent stake from KKR Infrastructure in 2016 and then a further 19.9 per cent stake from Arjun Infrastructure Partners last year.

The deal follows the completion of a strategic review of Electricity North West and comes as energy networks in Great Britain are facing heightened scrutiny over their legitimacy and profitability.

Ofgem has vowed to cut network returns to their “lowest ever” level for the RIIO2 price controls, which start in 2023 for electricity distribution.

Meanwhile, the Labour party has pledged to take all energy networks in Great Britain back into public ownership if it comes to power, with local network operators being replaced with a series of regional energy agencies.