The Association of British Insurers has unveiled a 10-point action plan to help members invest in British infrastructure.
In a report from the ABI's investment delivery forum, the forum said the objectives - both near-term and longer-term - would "address the complex challenges of infrastructure investment and capitalise on the opportunities of Solvency UK reforms".
According to the report, which has been welcomed by Treasury ministers and non-governmental organisations, the steps set out a plan for expanding the insurance industry’s investment capabilities, identifying and developing viable infrastructure projects, and creating a more conducive regulatory environment.
Baroness Nicky Morgan, chairperson of the Investment Delivery Forum said: “Members of the forum stand ready to act to accelerate the nation’s investment into green and good infrastructure. This will deliver growth, jobs and help us meet our net zero targets.
“The work done by the forum on new funding models, such as the EV charge point programme, are essential to facilitate the flow of private capital into the green infrastructure transition and a number of members see nuclear as an attractive investment.”
The report said by delivering on this action plan, forum members would play a "critical role in bridging the UK’s investment gap, accelerating the transition to a zero-carbon electricity system, and unlocking sustained growth across the UK".
The report also pledged that further regulatory engagement will continue, including the investigation of options for enhancing the PRA’s approval processes through the use of an investment accelerator or project sandbox.
The 10 action points are:
- Electric vehicles (near-term): Developing the Green Transition Fund, in collaboration with the Green Finance Initiative, which can be used for critical infrastructure, and specifically address Electric Vehicle charging infrastructure challenges.
- Nuclear (also near-term): Should the government issue private debt in large nuclear reactors under the Regulated Asset Base model, there is appetite from some Forum members to finance this debt at competitive, long-term rates.
- Floating offshore wind (medium-longer term): Working with Scottish National Investment Bank and UKIB to support the development of a globally competitive floating offshore wind supply chain in Scotland, and across the UK.
- Emerging technologies: For ABI members to play an active role when the emerging low-carbon energy sectors start to mature, including carbon capture, usage and storage, hydrogen and small modular reactors.
- Retrofitting at scale: Supporting local authorities with the retrofitting of residential properties. This represents one of the biggest sources of emissions in the UK, with around 8mn additional buildings needing to switch to low carbon heating by 2035.
- Regional engagement: Continuing to work with the Greater Manchester Combined Authority on opportunities and potential barriers linked to Solvency UK reforms, and replicating this engagement with other strategically identified regions across the UK.
- Investment tracking: Monitoring the investments into productive assets made across the industry to ensure the ABI forum continues to work towards its £100bn commitment.
- Regulatory engagement: Continuing to work closely with regulators, such as the Prudential Regulation Authority, on ‘sandbox’ mechanisms to help improve issues around the balance sheets of such assets, making it easier for insurers to invest in those assets.
- Blended finance: To ensure ongoing dialogue and sharing best practice across the team at HM Treasury and the insurance industry on blended finance models.
- Building collaboration: Continuing to facilitate and replicate constructive and valuable interactions between project sponsors and investment fund managers, to help accelerate greater levels of investment into green infrastructure.
Tulip Siddiq, economic secretary to the Treasury said: “I welcome the final report of the Investment Delivery Forum, which sets out a clear plan to deliver on the £100bn pledge insurers have made to invest in critical UK infrastructure.
"I look forward to working with the sector in my new role as City minister as we take action to drive sustained economic growth in the UK so we can make every part of our country better off.”
Rhian Mari-Thomas, chief executive of the Green Finance Institute, said: “Partnership is essential if we are going to meet our net zero targets in the UK.
"Not just a partnership of public and private capital investment, but also a partnership of ideas - as demonstrated by the Forum and the GFI in building out these innovative solutions to fund essential infrastructure and lower emissions.”
