The UK National Wealth Fund has set out a major five-year investment plan focused on carbon capture, battery manufacturing, hydrogen and power grid upgrades, as the Labour government looks for fresh ways to kick-start Britain’s sluggish economy.
The plan, published this week, outlines where billions of pounds of public-backed investment will go between now and 2031, and why ministers hope it can unlock jobs, private money and long-term growth.
The fund says it will invest £4bn to £5bn a year, targeting industries linked to clean energy, infrastructure and domestic supply chains. Around 200,000 jobs could be created or supported if the strategy works as intended.
What is the UK National Wealth Fund and why does it matter now?
The UK National Wealth Fund (NWF) is a government-owned but independently run investment body set up in 2024, replacing the former UK Infrastructure Bank.
Its job is simple in theory but tough in practice: use public money to attract private investment into key parts of the economy that struggle to get funding on their own.
The timing matters. Britain’s economy has grown slowly since the pandemic, energy costs remain high, and the government is under pressure to show clear progress on both growth and net zero targets.
Polling pressure on Prime Minister Keir Starmer’s Labour government has added urgency to flagship economic projects like this one.
As NWF chief executive Oliver Holbourn put it when unveiling the plan: “We’re going to go faster and in a more focused way.”
Which sectors will the National Wealth Fund invest in?
The fund has identified ten priority sectors for investment over the next five years. These include:
- Carbon capture and storage (CCS)
- Battery manufacturing
- Hydrogen production
- Power grid upgrades
- Ports and logistics
- Nuclear energy
- Energy storage
- Green steel
- Advanced materials
- Critical minerals
While clean energy sits at the heart of the strategy, the fund will also consider selective investments in defence-related supply chains, where these overlap with national resilience and manufacturing capacity.
The focus reflects a wider push to make the UK more self-sufficient, particularly after recent supply chain shocks linked to global conflicts and trade disruption.
How much money is available and where will it go?
The UK National Wealth Fund currently has around £28bn available for investment. About 30% of that money has already been allocated to roughly 70 projects, leaving significant capital still waiting to be deployed.
Holbourn said the fund aims to invest £4bn–£5bn every year until 2030/31, using a mix of loans, equity stakes and financial guarantees.
The fund does not publicly disclose its target rate of return, but it says projects must be financially credible as well as strategically important.
Key investments so far include:
- Funding for Sizewell C, the new nuclear power station under construction in Suffolk
- A £600m loan to Iberdrola-owned ScottishPower to help upgrade the UK electricity grid
- A financial guarantee supporting SSEN Transmission’s grid expansion plans
These projects reflect a clear theme: upgrading ageing infrastructure to support electrification, renewables and industrial growth.
How could this affect jobs and local economies?
The fund estimates its strategy could create or support around 200,000 jobs across the UK.
Many of these roles are expected to be outside London and the South East, particularly in industrial regions linked to ports, energy hubs and manufacturing clusters.
For example, battery factories and hydrogen projects often rely on nearby skilled labour and long-term supply contracts.
That can bring steady employment to areas that have struggled since the decline of traditional heavy industry.
Local councils and devolved governments are likely to watch closely, as NWF backing often helps projects secure extra private investment.
How does this fit with the UK’s net-zero goals?
The investment plan aligns closely with the UK’s legal commitment to reach net zero emissions by 2050.
Technologies like carbon capture, hydrogen and energy storage are seen as essential for cutting emissions in heavy industry and power generation.
However, critics have warned that carbon capture projects can be expensive and slow to deliver. Supporters argue that without them, some industries would simply move overseas, taking jobs and emissions with them.
The fund says it will judge projects on both economic impact and environmental benefit, rather than funding green projects at any cost.
What should readers watch next?
Over the next year, attention will turn to which projects get funded first and how quickly money moves from plans to construction sites.
Speed matters, especially as households and businesses feel the pinch from weak growth and high bills.
