Parliamentary Information Office / UK GREEN INVESTMENT BANK
UK GREEN INVESTMENT BANK
The Parliamentary Information Office has been
monitoring progress towards the set up and implementation of the UK Green
Investment Bank following the Energy Act last year
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 will
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.
Delivery schedule
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.
And in May this year the UK
Green Investment Bank (UK GIB) moved a step closer to going live. The Business
Secretary announced the formation of the public company and the appointment of
its top directors.
Lord Smith of Kelvin will be
the new Chair of UK Green Investment Bank plc. Currently Chair of SSE and The
Weir Group, he has a strong financial services background, chairing the group
set up by the Financial Reporting Council in 2003 to clarify the role of audit
committees.
Sir Adrian Montague has
been appointed as Deputy Chair and Senior Independent Director. Sir Adrian, who
is chair of companies including 3i and Anglian Water Group, has been chairing
the GIB Advisory Group and has been closely involved with the development of the
bank.
Business Secretary Vince
Cable said:
"The UK GIB is a major
new innovation vital to securing investment in what is one of the great
challenges of our age, the decarbonisation of our energy supply. It has found
two candidates of outstanding calibre well suited to leading the bank through
its important early phase."
Lord Smith said:
“It is a pleasure to be
asked by the Business Secretary to chair this groundbreaking institution. I
look forward to working with Sir Adrian Montague and can’t wait to get
started.”
Deputy Prime Minister Nick
Clegg said:
"Lord Smith and Sir
Adrian bring significant expertise and strong track records of delivery.
Britain is already a powerhouse in green industries, but we are still not
tapping all of our potential. I am determined that the Government will do
everything it can to support this burgeoning sector and set the UK firmly on
course towards a green and growing economy. The UK GIB will play a key part in
this."
Scottish Secretary Michael
Moore said:
“The UK GIB is set to play
an essential part as we build and invest in a greener future. This is a UK
institution headquartered in Edinburgh supported by a strong team in London and
the news that Lord Smith and Sir Adrian Montague have been appointed is another
step towards the bank opening for business. They bring a wealth of experience
to the roles and will bring that to bear as we look to encourage private sector
investment in key energy projects.”
The will begin the
recruitment of the company’s other directors and senior executive team shortly.
The Board is aiming for a fully operational UK GIB this autumn, subject to
state aid approval from the European Commission.
Following these
appointments, the Advisory Group chaired by Sir Adrian Montague will be
disbanded.
The UK GIB headquarters
will be in Edinburgh, with an office in London to enable a greater commercial
reach nationally than could be achieved from one location.
The Enterprise and
Regulatory Reform Bill includes legislation to set the Bank’s green purpose,
embed its independence and make funding provision for the Bank.
The Parliamentary Information Office will continue to report on environmental issues and their impact on the UK as we go through the months ahead.
9th August 2012
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