Getting new investors into the infrastructure sector

  • Rock Infra

It is well known that investments in infrastructure projects should be very attractive to institutional investors with long term liabilities given the stable long-term cashflows that infrastructure projects enjoy. The possibility of all or part of these cashflows being index-linked furthers the appeal to institutional investors.

The announcement made in December 2013 that six leading UK insurers (Aviva, Friends Life, Legal & General, Prudential, Scottish Widows and Standard Life) will work alongside Government, regulators and other interested parties, with the aim of delivering at least £25 billion of investment in UK infrastructure in the next five years is a very welcome step.

As this announcement sets out, in order to gain from this investment projects must be commercially and economically viable and must be designed in a way that is familiar to insurers and other investors. The message from these insurers is clear – any infrastructure project presented to them for potential investment should be an investable proposition with an acceptable and simple to understand risk profile to allow for a quick assessment of the opportunity. The targeted £25 billion investment is not “free” money.

The introduction by the UK Government of the UK Guarantee Scheme (which was first used in a PPP on the Mersey Gateway Bridge PPP where Rock was acting as the development partner for Halton Borough Council) and the introduction through PF2 of equity funding competitions post preferred bidder should make infrastructure more accessible to institutional investors. The UK Guarantee Scheme means that institutions providing debt to infrastructure projects do not need to do lengthy due diligence on the underlying project. The use of equity funding competitions under PF2 mean that institutional investors can bid to provide equity to a project once the winner of the bidding competition is known, rather than spend effort – time and money – supporting a bidder for a project that ultimately may lose.

However large scale infrastructure projects remain complex and take a long time to develop before they are in a form that can be presented to institutional investors in a state that meets the criteria set out in December’s announcement. This is where Rock comes in.

Rock, as an independent developer of infrastructure projects, focuses on the commercial and financial aspects of infrastructure projects. We have an excellent reputation for the structuring and closing of complex infrastructure projects with both the private sector and central and local government.

Our independence means that we can use our skills and expertise to bid and structure infrastructure investments free of conflicts or pre-determined requirements. Our approach ensures that projects are structured to be acceptable to the market, but at the same time in a way that meets the needs of the public sector, resulting in the optimal bid.

Our approach recognises that institutional investors are different and therefore the right investor for a project based on the needs of a procuring authority or the characteristics of a particular project needs to be found. Ours is not a “one size fits all” approach. We invest our own time in the intensive early development phase of a project to ensure that projects are only presented to potential investors when ready so that an institutional investor can deploy its own human resources more efficiently and cost effectively. We will lead bids and encourage institutional investors to become part of the bidding consortium once the project is sufficiently developed.

The future of the UK infrastructure sector is bright. The UK Government has clearly set out its priorities for investment in UK infrastructure in the National Infrastructure Plan which includes mega projects such as the £4 billion Thames Tideway Tunnel and the expansion of nuclear energy capacity through the construction of new nuclear power stations. These projects will inevitably require tapping the capital of institutional investors and therefore it is important that the public and private sector does all it can to facilitate this investment.

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Driving Net Zero: How Rock Road 
Is Funding the UK’s Bus Transition

Accelerating the shift to clean, affordable, zero-emission transport

Year
2025
Category
Rock Road
Share

The Challenge

The UK bus network is at the heart of everyday travel – but over 30,000 diesel buses still need replacing to achieve a fully zero-emission fleet.

While around 5,000 battery-electric buses are already on the road, the high upfront cost of electric vehicles and depot electrification continues to slow the transition. Traditional funding routes — such as government grants or short-term bank finance – have helped start the journey but cannot support decarbonisation at the scale required.

A new, sustainable funding model was needed: one that could attract long-term capital, spread costs fairly, and give operators and authorities confidence in the future.

The Solution

In 2021, Rock launched Rock Road to deliver exactly that –  applying its proven infrastructure financing approach from the rail sector to the UK’s clean bus revolution.

Working with Aviva, the National Wealth Fund, and HSBC, Rock created a dedicated investment platform that channels infrastructure-style finance from pension funds and institutional investors directly into zero-emission bus projects.

This model provides:
  • Access to billions in long-term private capital for fleets and depot electrification.
  • Low-cost, sustainable finance tailored to public-sector needs.
  • Comprehensive risk transfer, including residual value and battery performance, supported by Rock’s in-house team of engineers and asset managers.

Impact

The platform has already raised £100 million, with capacity to scale to £1 billion per year over the next decade – providing a consistent source of affordable capital for local authorities and operators.

Rock’s model ensures that the total cost of ownership (TCO) of electric buses can now be lower than diesel equivalents, thanks to both cheaper long-term finance and reduced operating costs.

In London, Rock has financed 120 zero-emission buses under 7-year leases aligned with Transport for London’s contract lengths. This structure gives operators flexibility and certainty:

  • Buses can be returned, renewed, or upgraded at the end of term.
  • Lease rates are predictable and capped.
  • Ownership and residual risks sit with Rock, not the operator.

The Future

Rock Road’s ambition is to support the rollout of zero-emission fleets across the UK – helping local authorities and operators meet climate goals without overextending public budgets.

By leveraging limited government funding to attract large-scale private capital – for example, £10 million of public investment unlocking over £250 million in total funding – Rock’s model accelerates decarbonisation while keeping costs low for the public sector.

Our ambition is to make electric buses the default choice - not because of subsidy, but because they are the best economic and environmental option.
Louis Swindell
Commercial Director, Rock Road