The joint financing of Net Zero Teesside Power (NZT Power) and the Northern Endurance Partnership (NEP) represents a landmark in European sustainable finance. Finalised in December 2024, the £8 billion transaction is the largest project financing in the UK in decades and the first to fund a full-scale carbon capture and storage (CCS) system through limited-recourse project finance.
The two projects form the backbone of the UK’s East Coast Cluster, a strategically important initiative to decarbonise heavy industry in Teesside and the Humber. NEP will provide the transportation and permanent offshore storage infrastructure for captured CO₂, with an initial capacity of 4 million tonnes per year. NZT Power, a gas-fired power station with integrated CCS, will capture up to 2 million tonnes of CO₂ annually while supplying low-carbon electricity to over 1 million UK homes.
The projects are being developed by a consortium including BP, Equinor and TotalEnergies. Societe Generale acted as exclusive financial adviser, mandated lead arranger and hedging bank across both transactions. Barclays, BNP Paribas, ING, Santander, NatWest, Lloyds, Bank of China, MUFG and Mizuho were also among the large roster of banks participating in the transaction.
The financing structure is notable for its innovation, scale and blueprint potential. It combines private capital with long-term policy support from the UK government, delivered through the Department for Energy Security and Net Zero. NEP is supported by the Transportation and Storage Regulatory Investment regime, which provides revenue certainty and de-risks investment in nascent CCS infrastructure.
For its scale, structure and strategic importance, the financing of NZT Power and NEP sets a new benchmark for ESG finance in Europe
The projects are equally critical. NEP unlocks the shared infrastructure backbone; NZT Power demonstrates commercial CCS at plant level. It will support 2,000 direct jobs and unlock £4 billion in UK supply chain contracts, helping to establish Teesside as the country’s first decarbonised industrial cluster. The projects are also aligned with international ESG reporting standards and are being discussed as a model for future CCS and net-zero infrastructure elsewhere.
Despite the exit of Shell and National Grid Ventures from the NEP consortium during development, the remaining sponsors have maintained their commitment, reinforcing market confidence in the long-term viability of the projects.
For its scale, structure and strategic importance, the financing of NZT Power and NEP sets a new benchmark for ESG finance in Europe. It demonstrates how public-private collaboration can deliver credible, bankable solutions to industrial decarbonisation and energy transition.
