Background
Financing the UK Green Investment Bank
Budget 2011 set out the UK government's intention to allocate £2bn to the UK Green Investment Bank on top of £1bn of funding already announced in the Spending Review, for investment and capital over the period to 2015.
The ambition is to grow the UK Green Investment Bank over time. Government will enable the bank to have borrowing powers from 2015-16 if the target for debt to be falling as percentage of GDP has been met.
The UK Green Investment Bank will play a key role to address financial market failures
Tailored and targeted financial investments can help to overcome risk aversion, high transaction costs and the resulting lack of capital and complement other policies. A wide range of sectors are likely to be eligible for intervention over the full period of transition to a green economy and these will change over time.
UK Green Investment Bank set up as an enduring institution
The bank has now been incorporated as a public company called UK Green Investment Bank plc. Its status as a Companies Act Company with an independent board is crucial to help ensure the bank will operate at arm’s length from Government.
The bank will need state aid approval before it can become fully operational. It will be enshrined in legislation to confirm its independent status as an enduring institution.
The Companies House website provides access (for payment of a small fee) to the company's two constitutional documents, the Articles of Association and the Shareholder Relationship Framework Document. Article 3 of the Articles of Associations sets out the company's Green Objective.
Full document update of the design of the Green Investment Bank (PDF, 484 Kb)
Written ministerial statement on the Green Investment Bank, 12 December 2011
