After taking into account approximately £1.1 billion of new non-recourse project finance debt, Centrica’s 50% share of the equity investment is approximately £200 million.
Key highlights of the transaction include:
- Grain LNG delivers vital energy security for the UK, providing critical LNG import/export, regasification, and rapid response gas storage capacity to balance the energy system.
- Aligned with Centrica’s strategy of investing in regulated and contracted assets supporting the energy transition, delivering predictable long-term, inflation-linked cash flows, with 100% of capacity contracted until 2029, >70% until 2038, and >50% until 2045.
- Opportunities for efficiencies to create additional near-term value, and future development options including a combined heat and power plant, bunkering, hydrogen, and ammonia.
- Highly efficient funding structure, with Centrica’s equity investment of approximately £200 million alongside non-recourse project financing.
- Strong life of asset returns aligned with Centrica’s financial framework, with an expected unlevered IRR of around 9% and an equity IRR of around 14%+.
- Underpins delivery of £1.6 billion end-2028 EBITDA target – Centrica’s share of EBITDA expected to be approximately £100 million per annum and cash distributions expected to be around £20 million on average per annum for 2026 - 2028, representing an attractive yield on Centrica’s equity investment.
- Partnership with ECP (part of Bridgepoint Group plc), one of the largest private owners of natural gas generation and infrastructure assets in the U.S. with direct experience in supporting grid reliability.
Chris O'Shea, Group Chief Executive, Centrica plc, said: “The Isle of Grain terminal is a strategic asset that will support the UK’s energy security for many decades to come, keeping energy flowing reliably and affordably to households and businesses across the country as we transition to net zero. That is why we are pleased to be investing, continuing Centrica's pivot towards long-term, predictable infrastructure cash flows, underpinning our medium-term guidance and creating valuable future options. Our decision to commit £3 billion of capital in both Sizewell C and the Isle of Grain demonstrates the attractiveness of the UK as an investment location underpinned by supportive government investment policies.”
Tyler Reeder, President and Managing Partner, ECP, said: “As one of the largest private owners of natural gas generation and infrastructure assets in the US, ECP has long understood that natural gas is indispensable to keeping grids resilient and advancing the transition to a lower-carbon future. With the emergence of the US as a global leader in low-cost LNG supply and the growing need for reliable natural gas supply across the UK and Europe, we believe Grain LNG will increasingly be relied upon as critical infrastructure to deliver dependable energy to local markets.”