Specialist pensions insurer commits £150m to launch NWF-backed guarantee scheme

The NWF said that giving bond market investors access in this way “helps accelerate the retrofit of social housing stock across the UK, thus significantly reducing both the sector’s energy consumption and emissions”.

Social Housing reported in December that the scheme was expected to launch early this year and would support an initial £300m of funding in two tranches – one of secured, unguaranteed funding for general purposes and one of unsecured, guaranteed funding (for retrofit).

Commenting on the scheme’s launch, chancellor Rachel Reeves said: “Growth to get more money in people’s pockets is my number-one priority.

“This new partnership will unlock £150m in private investment and create further jobs, building on the 6,500 jobs already expected in the retrofit sector across the UK, so more people can get sustainable, high-quality, energy-efficient social housing.

“The National Wealth Fund is mobilising billions of pounds of investment in our world-leading industries, creating jobs and kick-starting economic growth, as we deliver on the country’s priorities in our Plan for Change.”

John Flint, chief executive of the NWF, said that the deal was another example of the NWF “working collaboratively with the private and public sectors to provide practical solutions to complex financing problems”.

“The launch of a long-term, attractively priced, unsecured offer into the market by THFC will accelerate uptake and increase the ambition of projects in retrofit,” he said.

“Our support for THFC builds on our work in the sector, helping mobilise long-term institutional capital like Rothesay’s into social housing retrofit, which will give confidence to both the sector and associated supply chains.”

Mr Flint announced last month that he would step down as the bank’s chief executive in the summer after seeing through the organisation’s transition from the UKIB.

Priya Nair, chief executive of THFC, said: “As the largest provider of institutional capital to the social housing sector, THFC is committed to solutions that enable the industry to improve homes and create sustainable communities across the UK.

“Partnering with the NWF on this innovative approach to retrofit funding will bring significant benefits to the sector. The collaboration will help decarbonise the social housing sector and support the country’s net zero ambitions.”

Tom Pearce, chief executive of Rothesay, said: “As a long-term investor in the UK, Rothesay is pleased to provide the funding for the launch of this new facility, supporting housing associations across the country to access the investment they need to reduce their environmental impact.

“Innovative partnerships like these have the potential to unlock significant volumes of institutional capital and we are committed to continuing to work with the NWF and THFC to support the growth of the facility along with other future initiatives.”

The tie-up with THFC is the NWF’s second partnership in the sector, after it announced in October that it would provide financial guarantees for two banks to deliver £1bn in funding to support the sector’s retrofit efforts.

Barclays UK Corporate Bank and Lloyds Banking Group will each deliver £500m of lending to the sector, enabled by financial guarantees of up to £750m provided by the NWF.

In March last year, the UKIB said it was looking at “direct lending” opportunities to housing associations to fund retrofit projects, as well as the potential for a third-party-managed fund to make loans below its minimum threshold to smaller borrowers.

The National Housing Federation has previously warned that the total sum of decarbonising housing association stock could rise to at least £36bn to hit the government’s net zero 2050 target.