Our products and terms

We have £23.8 billion to invest in private sector projects or companies in the UK. We offer corporate and project finance and invest across the capital structure.  

We will target sectors where there are opportunities for us to make a real difference, bringing together the public and private sectors to mobilise finance while delivering a positive financial return for the taxpayer. Read more about these sectors on our strategy page.

We expect most of our capital will be invested through debt and guarantees. We will consider direct equity investments in the most promising businesses and projects in a limited number of our sectors, though the size and number of such investments will be significantly smaller than our debt and guarantee activities. 

We will consider offering these products on a case-by-case basis, supporting proposals that fall align with our strategy and meet our investment principles. If you have a project you’d like to discuss with us, get in touch. 

Debt 

We provide debt across the capital structure on a fixed or floating rate basis, and this includes senior and mezzanine debt. We do not offer revolving credit or working capital facilities. 

Guarantees 

We generally expect our guarantees to be used in larger transactions. All of our guarantees are backed by the Sovereign Infrastructure Guarantee, an agreement between the NWF and HM Treasury that will allow us to issue sovereign-equivalent guarantees to qualifying projects.  

This sovereign equivalence has been confirmed by Moody’s in their sector comment. 

We offer: 

Financial guarantees: providing credit substitution for an underlying debt instrument. The guarantee can support and encourage banks, insurers and pension funds to invest in key projects 

Credit enhancement guarantees:  mezzanine guarantee designed to enhance the credit quality or credit rating of the wider project debt.   Can be used to cover cost overruns, revenue shortfalls or senior debt service. 

First loss guarantees: covers a capped amount of potential first loss on a portfolio of smaller debt obligations 

Performance guarantees: protecting a party against any losses incurred in the event contractual obligations are not met. This could be from supplier delays or construction failures. 

We do not offer revenue guarantees. 

Guarantee documentation

• Sovereign Infrastructure Guarantee (SIG) updated September 2023
• Overview of SIG structure by Hogan Lovells
• Deed of guarantee in respect of guaranteed bonds (template)
• Security assignment in respect of guaranteed bonds (template)
• Guarantee and reimbursement agreement (template)

Equity 

We will consider direct equity investments in the most promising businesses and projects in a limited number of our sectors, though the size and number of such investments will be significantly smaller than our debt and guarantees. 

We provide growth capital to scale up businesses with proven technologies (our focus is on technology readiness levels 7-9), credible business plans, and strong management teams. We will expect to see evidence of products, revenue and customers which demonstrate this. Our focus is on later funding rounds – we are not an early seed stage or venture capital investor. 

The form of investment can be flexible, including ordinary equity, preferred equity and convertible loan notes. We will seek to invest equity alongside institutional investors to share risk and increase the catalytic impact of our capital. We take minority positions in companies and ordinarily will not want to be the largest shareholder. Generally, we do not expect to invest in third party investment funds.  

Pricing and terms 

We price on a commercial basis to reflect the risks we are taking, pricing on terms in line with other investors and generally balancing higher risks with additional credit mitigants. 

We may make investments on concessional terms – this is most likely where a government department covers the ‘concessional’ element of our investment and where it is a more cost-effective way of government supporting a sector than alternative forms of subsidy, such as grant programmes. This will typically only be available when announced for specific sectors and must be in compliance with the government’s Financial Transaction Control Framework (FTCF) and the Subsidy Control Act 2022.