The Wales Pension Partnership (WPP) has partnered with specialist lender Pluto Finance to provide capital for affordable housing projects across Wales.

As part of this initiative, Pluto Finance is expanding into Wales with plans to lend an initial £30 million in 2025, targeting housebuilders and developers to support the delivery of much-needed homes.

The investment will be made through Pluto Finance’s local impact programme, which enables Local Government Pension Scheme (LGPS) Funds and Pools to allocate capital to projects with significant regional impact while maintaining a diversified national loan portfolio. The focus will be on SME housebuilders, a sector facing increasing difficulties in securing traditional bank financing due to regulatory changes.

SME housebuilders not only drive regional growth and job creation, but they are also three times more likely than national housebuilders to construct energy-efficient homes, making them key contributors to sustainable development. The funding from WPP aims to address these challenges, supporting the construction of affordable homes while strengthening Welsh supply chains and communities.

Key aspects of the investment include:

• Providing targeted funding to SME housebuilders struggling to access bank loans.
• Supporting local regeneration and economic growth through affordable housing projects.
• Contributing to the UK government’s plan to build 1.5 million new homes.
• Leveraging private debt to recycle investments and expand housing supply over time.

Cllr Elwyn Williams, Chair of the Joint Governance Committee for the Wales Pension Partnership, said: “The Wales Pension Partnership is committed to providing productive capital into Wales and we are delighted to have found a solution that delivers both in financial and local impact terms. This investment made through our private debt allocator, Russell Investments, will look to support both the Welsh economy and the affordable housing needs of our local community.”

Ashley Manning-Brown, Head of UK Investor Solutions at Pluto Finance, added: “We are thrilled to be working with the Wales Pension Partnership to help them deliver a step change in local, affordable housing. By utilising our innovative approach to place-based investment, the WPP will be supporting local communities and their housing needs while delivering investment and SME job creation into the region.”

With this investment, WPP and Pluto Finance aim to make a lasting impact on housing availability in Wales, ensuring more homes are built while fostering economic stability and sustainability.