The Global Centre of Rail Excellence (GCRE) has announced that it is inviting investors from across the world to take an equity stake in its business and support the next phase of the project’s development.
GCRE, a purpose-built rail innovation centre being constructed in South Wales, will be a site for world class testing of rolling stock, infrastructure and innovative new technologies that will fill a strategic gap not just in UK rail, but across Europe.
With kick-start public funding already in place from both the Welsh and UK Governments, the project is due to start construction early in 2023 and will be fully operational in 2025.
The project is now taking the next step in its development with GCRE Ltd, which is currently wholly owned by the Welsh Government, seeking a joint venture partner (“Strategic Investor”) to develop and fund GCRE to completion.
The Strategic Investor will play a lead role in the project’s successful and timely implementation, along with further commercialisation of the GCRE opportunity. The Strategic Investor could be a single investor or a consortium of investors, who will acquire a majority shareholding in and control of GCRE Ltd.
A formal procurement process has begun with the publication of a Prior Information Notice (PIN).
Chief Executive of GCRE Simon Jones said:
“The Global Centre of Rail Excellence is one of the most important and creative rail infrastructure projects in rail today. As a purpose-built, integrated site for world class testing, research and development of rolling stock, infrastructure and new rail technologies, it will be a vital addition to the railway industry landscape, not just in the UK but across Europe.
“Our plan has always been to work with private sector partners to seek their investment and, importantly, their knowledge and skills in key areas such as rail and energy to realise the exciting GCRE vision as strategic partners. Both Welsh and UK governments recognise that as a commercial venture GCRE needs private sector support to be built and become established.
“With the launch of a procurement process this week we want to encourage partners from across the world to look at our project and to recognise the strong investment opportunity it represents.
“The GCRE project has attracted significant interest from right across the rail industry. Manufacturers and major parts of the rail supply chain see the chance to test and refine their products at a world class site, helping them to become more commercially successful and support the vital industry work needed to get to Net Zero. It’s this interest that helps make GCRE such a strong commercial proposition.”
The GCRE project includes the construction of a £250m railway. Further phases of potential investment include development of the wider commercial potential of the 700 hectare site – including the creation of a new business technology park and hotel. The total investment for the development, including initial property developments and the traction power supply, is £400m
Planning permission has been secured for the project and its twenty four hour, seven day a week operation, with construction beginning in early 2023. Site clearance has already commenced and an experienced management team is in place to drive the project forward.
The GCRE team have been working with EY as financial adviser and Ashurst LLP as legal adviser to develop the procurement process, details of which have been published today through a Prior Information Notice (PIN).
Following this, on Wednesday 7th December 2022, the GCRE team will be holding an event in London to discuss the opportunity ahead in more detail with potential strategic investors. The event will include presentations on the GCRE project with supporting speakers from Government and the wider industry.
Simon Jones added:
“This investment opportunity is unique and we welcome interest from investment partners with experience in areas including rail infrastructure, energy and major projects.
“An important part of our work will be in energy. To ensure that we meet the power needs of our customers; deliver on our Net Zero ambitions and harness the commercial potential of our large site, we are also keen to talk to investment partners with experience of large energy systems with an appetite to invest in decarbonising the railway and supporting the work we are doing.
“This is an incredibly exciting opportunity to become part of a critical infrastructure project for rail, with a very strong commercial future. We’re looking forward to talking with those who share our vision and can help us make it a success.”
GCRE Ltd was established in 2021 by the Welsh Government with a £50m capital commitment. Further funding is being provided by the UK Government, including a £20m capital commitment and £7.4m provided through Innovate UK for Research and Development (R&D).