The newspaper cited a government source as saying the projects would offer funds a higher return than standard government bonds, and that Britain's finance ministry would consider underwriting some of the initial risk of projects.
"If you've got a long-term infrastructure need why wouldn't we be looking to put sensible money into that," the source was quoted as saying."Pension funds need to invest their money, they don't want it sitting in cash or government bonds. If you can put it into something that can get them a decent return, that is far better," the source said.Some British pension funds have struggled to find sufficient high-yielding, safe investments to meet their liabilities, while the uncertainty following Britain's vote to leave the European Union has sapped private businesses' willingness to invest.As well as infrastructure bonds, another option under consideration is to allow British cities, which have very limited borrowing powers, to raise up to 1 billion pounds ($1.24 billion) in bonds underwritten by central government.The report did not say if the government saw pension fund finance as better value for taxpayers than raising money directly from bond markets, where borrowing money for 30 years carries an annual interest rate of under 2 percent