Pension funds join Santander in hunt for ‘superior returns’ from water and renewable energy projects


Regulators have rubber stamped the move by two major pension funds and Santander to launch a $2bn investment vehicle for water and sustainable energy projects.

Cubico Sustainable Investments, with 19 infrastructure assets transferred by Santander, will be headquartered in London. Cubico’s stated aim is for long term asset ownership delivering stable cash flows and superior returns.

Ontario Teachers’ Pension Plan and the Public Sector Pension Investment Board share equal ownership of Cubico with the bank. The firm said it had “significant capital” to invest and aimed to become one of the world’s largest renewable energy and water investment funds.

The proposed deal was announced before Christmas but has now been given regulatory approval. In December, Teacher’s said it planned to invest “significant additional amounts” in the new company over the next five years.

Santander’s two partners are among Canada’s largest pension funds and have a long history of infrastructure investment.

Ontario Teachers’ Pension Plan currently manages over $150bn in assets, of which around $12bn is invested in infrastructure projects. In the UK, it holds a 25% stake in Scotia Gas Networks, a 50% stake in InterGen as well as co-owning HS1. It also owns Bristol Airport and has a significant minority stake in Birmingham Airport.

The Public Sector Pensions Investment Board, which manages pensions of Canada’s public service, armed forces and Mounties, holds over $90bn in assets. It also owns stakes in airports, including Sydney airport and energy infrastructure interests include a stake in Norway’s Gassled, the transporter that moves gas from its continental shelf to Europe and the UK.

Energyst Media will publish Financing Energy Efficiency, a standalone report sponsored by Cofely, in June.

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