New funding for pioneering Liverpool Waters heat network scheme

Work under way on energy network

Fresh funding has been secured for a heat network at the £5.5bn Liverpool Waters development.

CBRE’s investment advisory team, part of CBRE Capital Advisors, arranged further funding from the Merseyside Pension Fund Catalyst Fund to support the next phases of the development of the heat network, taking the total Catalyst facility to £20m.

The heat network is one of Liverpool’s most significant regeneration projects having been recently awarded central government grant funding from the Heat Networks Investment Project.

The network will be delivered by Peel NRE, part of Peel L&P, and will be an integral part of Peel L&P’s Liverpool Waters regeneration project.

Peel NRE has established a dedicated energy supply company called Mersey Heat which will build, own and operate the heat network. Once complete, the first phase will provide up to 19 gigawatt hours of heat energy per annum to consumers at Liverpool Waters and the greater waterfront area.

The funding has already facilitated the development of initial underground pipes to transfer heat energy at the Princes and Central Docks, and northern areas of Liverpool Waters. The continued support will establish a permanent energy centre at Great Howard Street and further phases of underground pipes connecting the heat network to developments in Liverpool Waters such as the Titanic Hotel.

The network is expected to save around 4,200 tonnes of carbon per year.

The funding marks the third investment backed by the pension fund’s Catalyst vehicle since its establishment in 2017, and meets the Catalyst criteria of promoting projects that support the economy in the Liverpool City Region.

Herbin Duffield, director, investment advisory, CBRE Capital Advisors, said: “We are very happy to be involved in arranging this loan facility on behalf of the Merseyside Pension Fund to one of the region’s most established developers.

“The continued support will accelerate the delivery of an important regeneration project in the city region as well as facilitate low carbon heat and energy in keeping with the UK Government’s Clean Growth Strategy.”

Jonathan Burley, Peel NRE’s commercial director, said: “We are very pleased the Mersey Heat project is being financially supported by the local Merseyside Catalyst Fund. Their involvement highlights the importance the Liverpool City Region is placing on addressing low carbon energy generation and its willingness to innovate.”

He added: “So far, the UK has made great progress in de-carbonising the electricity sector but more needs to be done on heating and transport emissions. This is the next phase of a 10-year project, which we hope will eventually supply around 9,000 homes and numerous businesses along Liverpool’s waterfront.

“The scheme clearly demonstrates Peel L&P’s intent to play a significant part in tackling carbon dioxide emissions from heating, by providing a cost effective and attractive low carbon offering to residents and businesses.”

Peter Wallach, director of pensions at Merseyside Pension Fund, said: “Catalyst Fund represents MPF’s commitment to local development and regeneration, making a positive impact on the communities its stakeholders live, work and retire into while seeking commercial return for its members.

“We are pleased to have made our third Catalyst Fund investment which will provide cost effective heat and power solutions to up to 9000 homes and four million sq ft of commercial space with cleaner CHP technology as part of the UK’s drive to reduce carbon emissions. We look forward to the potential of making similar investments in the future.”