INPP has a 4.4% interest in National Grid’s gas distribution networks (GDNs), acquired as part of the Quad Gas Group consortium’s purchase of a 61% interest in the GDNs on 31 March 2017 (now known as Cadent). The Consortium has also established the right to acquire an additional 14% equity interest in the GDNs from National Grid in due course.
The four networks each cover a geographic monopoly in the East and North West of England, North London, and the West Midlands, and distribute gas to approximately 50% of the country’s connected households through 130,000km of gas pipeline.
GDNs are well-established, predictable, and strong cash-yielding businesses. Key attributes include:
- Highly-predictable, long-term, low-volatility cash flows
- A stable regulatory environment
- Very long-life assets
- Strong levels of inflation linkage
- Projected strong returns
INPP’s investment in GDNs strengthens its focus on investments in regulated assets delivering long-term, sustainable, inflation-linked revenues. This began in 2011 in the offshore transmission (OFTO) sector and then with investment into the Tideway project in 2015. The GDN assets are complementary to the other assets in INPP’s portfolio in terms of length and predictability of cash flow and also inflation protection.
Length of gas pipeline network
Proportion of UK population served