Launch of the £660m Northern Powerhouse Investment Fund II provides boost for Tees Valley

The British Business Bank has launched its new Northern Powerhouse Investment Fund II (NPIF II), a £660m fund set to cover the entire North of England. The Fund will continue to be available for businesses operating in South Teesside, Hartlepool and Stockton-on-Tees, and will now be expanded to include Darlington, Durham, Northumberland, Tyneside and Sunderland.
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Since the launch of the first Northern Powerhouse Investment Fund (NPIF) in 2017, it has delivered £83m of direct and private co-sector investment into 110 businesses, helping to create nearly 750 jobs across the Tees Valley.

Aiming to build on the success of the initial fund, the Northern Powerhouse Investment Fund II will now expand to include the whole of the North East enabling businesses across the North to access the Fund to start up, scale up or continue on their growth journey. The Fund will drive sustainable economic growth by supporting innovation and creating local opportunity for new and growing businesses.

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The Northern Powerhouse Investment Fund II will increase the supply and diversity of early-stage finance for Northern smaller businesses, providing funds to firms that might otherwise not receive investment and help to break down barriers in access to finance.

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With NPIF II now set to cover the entire North East, NEL Fund Managers (NEL) will provide both smaller loans (£25,000 to £100,000) and debt finance (£100,000 to £2 million) to North East businesses with Maven Capital Partners managing equity deals up to £5 million.

A business already benefiting from NPIF investment is Nova Pangaea Technologies, a Redcar-based cleantech company that converts biomass, such as agricultural residue, into sustainable sugars and biocarbons. Funding from NPIF provided the stepping stones to build its first commercial plant in 2023 at its base in the Tees Valley, creating a large number of highly-skilled local jobs.

Sarah Ellerby, CEO at Nova Pangaea Technologies, said: “The Northern Powerhouse Investment Fund’s involvement is one of the key reasons as to why we are in the strong position we are in today.”

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Louis Taylor, Chief Executive of the British Business Bank, said: “The success of the first Northern Powerhouse Investment Fund has proven the instrumental change that access to finance can have for small businesses. From creating hundreds of jobs to developing ground-breaking products, we have seen companies that previously lacked funding options accelerate forward in their growth journeys, which has ultimately benefitted the whole of the Northern economy.

“This is why it was important to continue the Northern Powerhouse Investment Fund into its next phase. With further funding available, and a greater geographical reach in the North East, the Northern Powerhouse Investment Fund II will engage more stakeholders across the regions, bringing the business community closer together to create more opportunities for entrepreneurs everywhere.”

Following today’s official launch in Leeds, the British Business Bank will be holding a roadshow of events for small business finance intermediaries across the region to learn more about the Fund.

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