As a central part of the government’s efforts to present themselves as a ‘green’ government, the workings of the Green Investment Bank were explained in more detail by Nick Clegg today.
As a central part of the government’s efforts to present themselves as a ‘green’ government, the workings of the Green Investment Bank initiative were explained by Nick Clegg today.
At the Climate Change Capital event in London, Mr Clegg talked about the workings of the world’s first Green Investment Bank, which will fill the gap between venture capital and the green economy, and provide the finance for low carbon infrastructure, while laying the foundation for long-term, balanced growth in the UK.
The bank is the first of its kind in the world. The government will bring forward legislation to ensure both the operational independence and enduring nature of the Bank: “[The government is] determined this organisation will be part of the institutional architecture of this country. Legislation will ensure a long shelf-life,” said Mr Clegg.
As well as establishing the bank, the government has announced a guaranteed £3bn for the initial capitalisation of the bank. “As we made clear in the Budget, we hope to generate these funds through asset sales, but we are also clear that the money does not depend on those sales,” said Clegg. “It has been underwritten by the Treasury, and it will be made available,” he added.
The first investments from the bank will be made available from April 2012, eleven months from now. Early priorities are said to include offshore wind, waste, and non-domestic energy efficiency.
Commenting on other uses of the Green Investment Bank, Clegg said: “We are also looking at the potential for using the Bank to help deliver the first stages of the Green Deal. In the initial period, investment decisions will be made under interim governance arrangements.”
Also, the Bank will have full operational independence under the leadership of a new board as soon as state aid clearance has been approved, and the bank will then be able to undertake a wide range of transactions, including equity, debt and risk mitigation products. Finally, the Bank will have borrowing powers from April 2015, on the basis – as set out in the Budget – that the Government target for debt to be falling as a percentage of GDP has been met.
Clegg was optimistic about the legacy the bank could leave, and its ability to quickly grow into an independent investing, and then borrowing, institution.