UK Law and Practice Contributed by: Federico Fruhbeck, Alice Brogi, Alex Bluett and Gisele Zouein, Gibson, Dunn & Crutcher LLP
challenging the traditional infrastructure model of stable, inflation‑linked cash flows. These pressures, coupled with grid and planning constraints, have particularly affected large new-build and merchant- exposed assets. Heightened policy uncertainty has also increased valuation risk and delayed final invest- ment decisions. Businesses are more selective and risk‑aware, with sharper focus on regulatory alignment and sup- ply‑chain due diligence. Projects are expected to monitor and report environmental impacts across life cycle carbon, biodiversity, and sourcing; those with- out credible ESG performance face tougher financing and stakeholder scrutiny. Energy security and system resilience have moved to the foreground alongside decarbonisation. With grid capacity constraints and global supply chain frag- mentation, businesses are diversifying into distribut- ed energy, behind‑the‑meter solutions, and enabling technologies that enhance flexibility and reliability. Interest has grown in battery storage, smart grid and forecasting technologies, and long‑duration stor- age, reflecting the need to integrate higher shares of variable renewables while mitigating system shocks. The result is a more disciplined, phased approach to capital deployment, with heightened scrutiny of pro- ject economics, supply chain integrity, and long‑term resilience. 1.3 Access to the Energy and Infrastructure M&A Market The investor mix remains diverse. Dedicated infra- structure funds continue to anchor major transac- tions, sometimes in club deals with pension funds and sovereign wealth funds. Strategic investors such as utilities, energy majors and corporates, are pursuing acquisitions and joint ventures to secure power and flexibility as part of decarbonisation and electrifica- tion strategies. Private equity and private credit are increasingly active in growth-capital and refinancing transactions, filling gaps left by tighter bank lending. Investor strategies have evolved from passive asset ownership to active platform building and poli- cy‑aligned partnerships. Private equity infrastructure funds are increasingly acquiring or creating scalable
platforms and growing them through bolt‑ons. Insti- tutional investors, including pension funds and sov- ereign wealth funds, continue to target long‑duration, de‑risked assets with contracted or inflation‑linked revenues, often via co‑investments or joint ventures. Many investors are also moving earlier in the project life cycle, funding late‑development or pre‑construc- tion stages in exchange for enhanced returns, often in collaboration with specialist developers. Secondary sales of operational assets remain a key tool for capi- tal recycling, freeing up equity for new development. 1.4 Energy and Infrastructure Projects In the energy sector, the Crown Estate’s Floating Offshore Wind Leasing Round 5 began in December 2023, with the invitation-to-tender stage starting in August 2024 and preferred bidder status for two of the Round 5 project sites being announced in June 2025. In July 2025, the UK government announced the final go-ahead on the GBP38 billion Sizewell C nuclear plant project. The government is the largest share- holder in the project, which has suffered extensive cost overruns and delays. The French energy major EDF is currently building the Hinkley Point C nuclear power plant in Somerset, which has also been plagued by delays and increased construction costs. On the infrastructure side, the Heathrow Airport expansion – including a new terminal, a third runway and enhancement of rail, road, cycle and pedestrian access to the airport – was revealed in August 2025 with a cost of around GBP49 billion. The plans for a third runway at the airport are backed by the UK gov- ernment but face significant environmental, political and local opposition. Other ambitious infrastructure projects include the Lower Thames Crossing, the TransPennine Route Upgrade, the A9 Dualling Project and Statera Energy’s 680 MW battery-energy storage facility in the Trafford Low Carbon Energy Park.
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