Aviva has made £500m finance immediately available for UK infrastructure projects Reuters

Aviva has unlocked £500m of immediately available cash to invest in UK infrastructure projects.

It falls under a wider £25bn (€30bn, $41bn) commitment by the British insurance industry, which relies on long-term investments with decent returns to meet pension and life insurance commitments.

The firm said it was able to make the investment because of clarity around the recently-agreed Solvency II rules on capital requirements and risk management in the European insurance industry.

"As a UK business with long term customer commitments we cannot just focus on today; we must be a good ancestor," said Mark Wilson, Aviva's group chief executive.

"Aviva is contributing the building blocks of the UK's future, making an additional £500 million available immediately to invest in the country's schools, hospitals and transport. We'll focus on investments which are good for our policyholders, good for society and good for the UK economy."

Kick-starting major infrastructure projects, struggling to find finance in the post-crisis credit squeeze, is seen by the UK government as crucial to the emerging recovery.

Ahead of Chancellor George Osborne's Autumn Statement 2013, the Treasury released an updated National Infrastructure Plan detailing where £375bn of capital investment would be focused until the 2030s. Net capital investment remains flat.

Projects span from transport, to broadband, to utilities and more, but no extra money is being spent on infrastructure work than previously allocated because of the government's commitment to public sector austerity.

"The insurance sector is a leading example of the UK's position as a centre for global finance and we intend to keep it that way," said Sajid Javid MP, financial secretary to the Treasury, on Aviva's announcement.

"That is why we are launching a UK insurance growth action plan today, to further strengthen the sector's contribution to economic growth and set out how we will work with industry to enhance the UK's position as a global leader in a truly global industry."

As well as encouraging the insurance industry to invest in infrastructure projects, the government also has the UK Guarantees Scheme to support the financing of major work. Under UK Guarantees the government underwrites the finances of nationally significant projects in order for lenders to release credit.