PGGM has taken an undisclosed stake in Madrileña Red de Gas (MRG), an important distribution network for natural gas in Spain.
The €189bn asset manager is part of a consortium that has taken over the network from a group headed by Morgan Stanley Infrastructure.
The new consortium comprises China-based Gingko Tree Investment and EDF Invest, the unlisted investment arm of EDF’s Dedicated Assets.
Its asset portfolio covers its long-term nuclear decommissioning commitments in France.
MRG manages a 5,500-kilometre network of average and low-pressure pipelines, supplying 59 councils with approximately 842,600 households in the Madrid area.
With the investment – on behalf of the €178bn Dutch healthcare pension fund PFZW and the €9bn occupational scheme for general practitioners SPH – PGGM has increased its European portfolio of energy-distribution firms.
In 2013, it took a 33.2% stake in the Northern Offshore Gas Transport System (NOGAT), a transport network between between North Sea gas fields and the Netherlands.
Last year, it took a majority stake in Ennatuurlijk, a company providing district heating for a large number of Dutch towns.
PGGM said the extension of the gas-distribution network in Spain would contribute to local sustainability targets and more efficient energy provision.
It added that the investment closely matched the aims of PGGM and its clients’ infrastructure portfolio.
Maurice Wilbrink, spokesman for the asset manager, said: “This regulated and quasi-monopolistic structure offers a stable cash flow to match our clients’ liabilities in an environment of extremely low interest rates.
“We are planning to increase our infrastructure allocation considerably.”
He said PGGM intended to double its infrastructure portfolio to €10bn within five years.
Commenting on the investment, Frank Roeters van Lennep, PGGM’s head of infrastructure, said the Spanish network was an important part of the country’s infrastructure.
“Natural gas will play an important role in the transition to an ever-cleaner energy mix in Spain during the coming decades,” he said. “MRG is to play a crucial role in this process.”
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