Green Investment Bank expected to be “fully operational” by end of year
Green finance news – by Louise Bateman
18th April 2012
The team responsible for setting up the world’s first green investment bank now expects to have the organisation "fully operational" by the end of the year.
Negotiations for EU State Aid
approval are "going well", according to Oliver Griffiths, executive director of the Green Investment Bank
(GIB), but he said the bank would likely not be fully functioning until the end of 2012.
"We hope we will have approval this year and be fully operational by the end of the year," he told a Parliamentary debate on the structure and function of the GIB yesterday. The Government had been anticipating the bank would have State Aid approval and be operational by the autumn.
UKGI open for business
Civil servants also confirmed yesterday that UK Green Investments (UKGI), a dedicated team within the Department for Business, Innovation and Skills (BIS) established to begin lending while State Aid approval is being sought, was now open for business and was having discussions with businesses and organisations large and small that fall within the banks five priority lending areas – offshore wind, commercial and industrial waste and recycling
, energy from waste, non-domestic energy efficiency
and the Green Deal. One of these is the Green Deal Finance Company
(GDFC), the not-for-profit company aiming to provide cheap loans to homeowners and businesses through the Government’s Green Deal energy efficiency scheme.
"We are working with [GDFC] to see how we could help," said Ian Nolan of the UKGI.
The GIB is a flagship green policy
of the Coalition Government, which wants it to become a "world leader" in green finance
. The bank, to be headquartered in Edinburgh, is being established to "tackle risk that the market cannot adequately finance" in order to quicken the UK’s transition to a low carbon economy. It will invest up to 80 per cent of its £3 billion budget over the first three years on priorities areas and Ministers believe the bank will be able to leverage a further £15 billion from the private sector.
However, the GIB will not have any borrowing powers until at least 2015, a move that has been widely criticised as a major restriction on the bank’s ability to be able to meet its objectives.
Mobilising private sector money
Griffiths confirmed yesterday that the GIB will invest up to £775 million in its first fiscal year and that it has set aside up to £100 million to invest in 'small waste’.
He said the bank was talking to local authorities and private sector organisations, including small to medium-sized companies, and that the bank’s door was open "to all".
"Our aim is to mobilise private sector money," he said, but he warned the GIB would not be a lender of last resort. "The worst thing that could happen would be for [the GIB] to be the 'dumb money’ at the table."
Yesterday’s debate at the House of Commons, was jointly held by the Westminster Sustainable Business Forum, the Associate Parliamentary Sustainable Resource Group and Carbon Connect. It was chaired by Nicky Morgan MP, Advisory Board member, Westminster Sustainable Business Forum.
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