Government-funded investment in the energy transition: What’s changed since April

Three months ago, we wrote about the growing role of Government-funded investors in financing the riskier parts of the UK’s clean energy transition. Since then, the National Wealth Fund (NWF) and the Scottish National Investment Bank (SNIB) have continued to invest in the energy transition, while Great British Energy (GB Energy) carves out its role in its first year of existence.

Guarantees, not just loans

The NWF continues to use guarantee structures with commercial banks ( in addition to offering direct lending). In May, it provided £350 million of financial guarantees in relation to a £500 million loan by Lloyds Banking Group to retrofit and decarbonise university estates. This enabled longer tenors and more flexible terms than Lloyds could otherwise offer.

The Fund has also provided a £202 million financial guarantee in relation to around £300 million of debt secured by DataVita for the expansion and construction of two data centres in the North Lanarkshire AI Growth Zone. The guarantee unlocked the £252.5 million facilities provided by ING, ABN AMRO and Santander. SNIB provided additional uncovered lending (a direct loan of £35 million), as did Siemens Financial Services.

These sit alongside over £2 billion of guarantees already provided by the NWF, including an £800 million guarantee in relation to a £1 billion loan provided to SSEN Transmission for grid upgrades; £1.3 billion of guarantees to support £1.65 billion of lending for social housing retrofits to reduce energy consumption and accelerate the decarbonisation of social housing stock; and a £300 million credit enhancement guarantee to support the construction of the Haweswater Aqueduct Resilience Programme.

By contrast, SNIB’s Investment Strategy 2026–2027, which was published in July, reiterated that it does not provide guarantees. However, in August Sir John Elvidge’s five-year review of SNIB noted that work was ongoing between SNIB and the Scottish Government to identify whether there is a market opportunity in this area. So, the policy may change.

Ports remain a focus

In June, NWF announced a £200 million loan to Associated British Ports (ABP), confirming that ports remain a key focus. The loan has been provided alongside Bank of America, Lloyds and NatWest, and is a long-term commitment: 17.5 years. It allows ABP to make infrastructure upgrades across its network, including at the Port of Lowestoft to support more offshore wind operations; at the Port of Ipswich to develop the local Sizewell C supply chain; and the development of Solent Gateway as a defence-linked logistics hub.

This transaction sits beside the NWF’s previous investments in the Port of Tyne and the Ardersier Energy Transition Facility near Inverness.

SNIB sharpens its strategy

SNIB has also refreshed its approach for the year ahead. Its new Investment Strategy restated its three missions — Innovation, Place and Net Zero — and has refined the focus on each. On Net Zero, the Bank is increasingly looking at opportunities in energy security and stabilisation. This is highlighted by SNIB’s recent acquisition, from Copenhagen Infrastructure Partners, of a minority stake in the Devilla Battery Energy Storage System (BESS) project near Kincardine.

The Bank continues to invest in portfolio companies. Last month it invested a further £25 million in North Star, an offshore infrastructure services company, taking its total funding to £75 million. The new funding is part of a £275 million financing package, and will support North Star’s acquisition of four new vessels.

GB Energy backs the supply chain

GB Energy has had a quieter summer than NWF and SNIB, but early August brought its first major investment in solar. It combined with Barclays Climate Ventures to make an £8.875 million investment in Naked Energy, a UK solar-thermal and photovoltaic-thermal technology developer. GB Energy’s £7.5 million share is drawn from its £1 billion ‘Energy, Engineered in the UK’ programme, and will back a new UK manufacturing facility expected to create up to 140 jobs.

It has also announced that it is looking for opportunities to co-invest with The Crown Estate’s ‘Supply Chain Accelerator’ programme. This is designed to support offshore wind supply chain businesses and projects and has been extended to a third round with an additional £15 million of funding. As with the Naked Energy investment, GB Energy would co-invest with capital from the ‘Energy, Engineered in the UK’ programme.

GB Energy’s latest investments are smaller, earlier-stage tickets compared to NWF or SNIB. This suggests that by backing the UK supply chain and manufacturing, GB Energy is finding its place in the market.

What this means in practice

In April we said that the line between state and market capital was “blurring fast”. It still is. However, public funds are under increasing strain: will the new administration at Westminster continue this trend? The way that the next Spending Review treats these institutions’ capital bases will be revealing. But for now, the direction is still towards more public risk capital, deployed through an increasingly sophisticated range of instruments.

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