Wales’ biggest pension fund has swung behind the beleaguered Swansea Bay tidal lagoon as ministers continue to weigh up whether to back the £1.3 billion project.
The Wales Pension Partnership (WPP), the pooled retirement investment fund for the principality’s local authorities, endorsed Tidal Lagoon Power’s pathfinding project last week.
The WPP’s joint governance committee gave in-principle backing at its latest meeting last week.
WPP Chair Cllr 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. Investment by pension funds in such projects is being encouraged by the UK Government.
“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.”
Swansea council leader Rob Stewart described the WPP’s backing for the lagoon as ‘fantastic news’.
He said: “It is an indicator that they will invest in the scheme should the Westminster government give the project the green light.
“Pension fund managers are an extremely cautious group. They recognise the importance of investing for the long term and they also recognise that pension funds need to look carefully at the impact of what they do.
“In this case they believe that it is worthwhile to examine the opportunities in investing in the future of a green technology that has the potential to generate sustainable energy for a century to come, as well as acting as a major boost to the local economy.”
The Welsh government revealed earlier this month that it has offered £200 million-worth of investment in the tidal lagoon project.
Wales first minister Carwyn Jones has claimed that the cash injection would cut the cost of any potential CfD (contract for difference) for the project to £92.50, the same figure awarded to the Hinkley C nuclear plant.
The Swansea Bay City Region partnership has also written to the Business, Energy and Industrial Strategy (BEIS) department to establish if the decision on whether to approve the project is purely taking into account whether it will increase electricity prices.
The government has been considering the recommendation of the Hendry review, which endorsed the tidal lagoon project, since it was published 18 months ago.