Prudential has been named the cornerstone investor in the £1bn ($1.6bn) Tidal Lagoon Swansea Bay Project, an innovative infrastructure development designed to generate electricity by harnessing the power of the sea.

The power station will become the world's largest tidal energy provider when it opens in 2018. It will generate over 495GWh of electricity every year for 120 years, enough to provide nearly all of the domestic electricity for the Swansea Bay region and saving more than 236,000 tonnes of CO2 each year.

The project represents the first step in a UK tidal energy network which aims to generate up to 8% of the UK's electricity. Construction is scheduled to begin in 2015 and will create almost 2,000 jobs.

"The financing of this power station is emblematic of the role that Prudential plays in transforming the hard- earned savings of millions of our customers into long-term, productive investment in the UK economy,” said Tidjane Thiam, group chief executive of Prudential. “Such investments provide our customers with strong and sustainable returns, create good jobs and increase productivity and economic competitiveness.”

The deal continues the trend of asset managers directly investing in infrastructure, posing a challenge to private equity firms and banks.

 forms part of Prudential's commitment to invest alongside five other major UK insurance companies a total of £25bn in the UK's infrastructure over the next four years.

Prudential's long-term insurance funds will provide the funding through its European asset management arm, M&G Investments. In the UK, Prudential currently manages around £25.8bn of direct infrastructure investments.

Several investment managers have set up dedicated infrastructure debt investment teams and the NAPF founded the Pensions Infrastructure Platform in response to demand from pensions for the long term stable returns provided by infrastructure investment.