Two of Denmark’s largest pension funds, PKA and PenSam, have partnered to invest DKK 3.4bn in electric trains for one of the UK’s most central train lines.
The trains will replace old diesel-powered trains on the East Coast Main Line, which links London with Edinburgh and Glasgow in Scotland. The pension funds said the investment will make public transport in the UK more efficient whilst creating long-term returns for members.
Investment firm, AIP Management, in which PKA and PenSam are co-owners and investors, will manage the investment. The pension funds will jointly own a 30 per cent share in Agility Trains East, which owns and leases the train fleet. The consortium of investors includes Japan’s Hitachi.
The trains will be leased to train operator London North Eastern Railway and the owners are guaranteed a fixed lease income on the train fleet by the UK Department of Transport until 2046.
With the investment, pension funds are stepping into the financing of one of the UK's biggest public-private partnership projects. The line is one of the UK's busiest national train lines. Every year, more than 22 million passengers travel on the line, which serves as a primary transport link to London for major cities such as Leeds, Newcastle and Glasgow.
The line is predominantly electric and the new trains are replacing old and less efficient diesel trains. This will help both to reduce the journey time of rail passengers and CO2 emissions on the train line.
Commenting, PKA investment director, Michael Nellemann Pedersen, said: " The investment fits very well with the aims of PKA and PenSam. We want to ensure a stable long-term return for our members while at the same time making a positive difference to the environment.”
PenSam investment director, Claus Jørgensen, added: "I am very pleased with the strong cooperation between PenSam and PKA, which ensures another solid investment in significant infrastructure.
“It contributes to good pensions for the welfare state's core troops - including social and healthcare assistants and nurses - while also providing a helping hand for the much-needed electrification of a central line on the UK train network.”
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