BAE Systems Pension Schemes have invested in a synthetic securitisation of a £1.1bn (€1.3bn) portfolio of green project finance loans granted by NatWest.

The investment was made via Macquarie Infrastructure Debt Investment Solutions (MIDIS) and BAE Systems Pension Funds Investment Management (BAPFIM), which is the lead investment manager for the aerospace and defence company’s pension schemes.

The pension funds have around £24.5bn in total assets.

Toby Buscombe, deputy chief investment officer at BAPFIM, said: “[The] transaction offered a good opportunity for us to build on our existing exposure to the UK renewables sector in a structured and non standard manner, which put the opportunity beyond the reach of many institutions.

“The investment offered commensurately attractive risk/return characteristics including a significant premium for illiquidity and complexity.”

According to a press release from MIDIS, the portfolio was made up of loans for projects involving onshore and offshore wind, solar, smart meters, and energy from waste and biomass power.

The loans meet the Loan Market Association’s green loan principles.

MIDIS said the portfolio’s annual electricity generation was anticipated to power the equivalent of 4.6 million households, with the carbon dioxide-equivalent (CO2e) avoided equivalent to taking 2.3 million cars off the road.