UK Green Investment Bank
Introduction
The UK is to set up the world’s first investment bank solely dedicated to greening the economy.
The initiative is part of the Government’s commitment to setting the UK firmly on course towards a green and growing economy, while also delivering long-term sustainable growth.
This transition to a green economy presents significant growth opportunities for UK-based businesses, both at home and abroad.
It will require unprecedented investment in key green sectors - an estimated £200 billion is needed for the energy system alone over the period to 2020.
The UK Green Investment Bank (GIB) will be a key component of the progression towards a green economy, complementing other green policies to help accelerate additional capital into green infrastructure.
Its mission will be to provide financial solutions to accelerate private sector investment in the green economy. Capitalised with £3 billion, the GIB will play a vital role in addressing market failures affecting green infrastructure projects in order to stimulate a step up in private investment.
It will build the necessary deep expertise in financial markets and green investments, working towards a ‘double bottom line’ of both achieving significant green impact and making financial returns.
Following best practice, the UK Green Investment Bank has been established under the Companies Act and operate at arm’s length from government.
The Government expects to obtain state aid approval for the GIB by autumn 2012. In advance of this, the Government will begin making investments in green projects from April 2012.
The GIB is one of a number of key policies designed help meet environmental objectives and promote economic growth. Other initiatives include the creation of a National Infrastructure Plan, reforms to the electricity market, changes to the climate change levy, the introduction of a renewable heat incentive, the review of waste policy and the reviews of Ofgem and Ofwat.
Several non-green specific policies also support our growth and environmental objectives, including banking reform, support for early stage innovation and skills provision.
The UK Green Investment Bank project will evolve over two phases, preceded by a programme of preliminary Government investment in green infrastructure.
- Preliminary phase: UK Green Investments – from 2012 until state aid approval for GIB is granted, BIS’s UK Green Investments team will make direct investments in green infrastructure projects
- GIB establishment – GIB will be established as a stand-alone institution following state-aid approval. It is expected that state aid approval will be granted by autumn 2012
- GIB full borrowing – from April 2015, the GIB will be given full powers to borrow, subject to public sector net debt falling as a percentage of GDP and further state aid approval being granted.
Project Governance
The Department of Business, Innovation and Skills is leading the Government’s work to develop the UK Green Investment Bank. It is working with a number of other government departments including the DECC, DEFRA, HMT, DfT, CLG and Infrastructure UK.
Detailed documents
Contact details
Contributions and/or more detailed questions should be directed to the BIS Green Investment Bank team.
