Deputy Prime Minister announced yesterday long-awaited details of Green Investment Bank, and confirmed its independence from the Treasury.
Online PR News – 27-May-2011 – – The UK’s Green Investment Bank will be investing in UK low-carbon projects within a year, and is expected to inject £15bn into the green economy within four years, Nick Clegg told a City of London audience on Monday.
Clegg said "The Green Investment Bank will go from an idea to a flow of investment in under two years, and quickly grow into an independent investing, and then borrowing, institution."
The announcement came as Sky News reported that Sir Adrian Montague, the former chairman of nuclear operator British Energy and current chairman of private equity group 3i, is poised to accept the job as chairman of the advisory group responsible for setting up the Green Investment Bank.
Clegg confirmed the Green Investment Bank will be backed by an initial £3bn of investment from government, £2bn of which will be raised from asset sales. He restated that the institution will not have borrowing powers until April 2015, and then only if "the government target for debt to be falling as a percentage of GDP has been met".
The move is expected to infuriate green groups that had been calling on the government to reconsider its ban on borrowing, and allow the Green Investment Bank to raise additional funds through borrowing instruments from day one.
However, Clegg stressed that the Green Investment Bank was intended to leverage private finance long into the future, insisting that it would be backed by legislation that ensures "both the operational independence and enduring nature of the bank". He also stressed that the government was moving quickly to ensure lending begins next year, and he hinted that the bank could be used to support the Green Deal building efficiency loan scheme, as requested by numerous green groups.
Clegg acknowledged that for many green campaigners, the Green Investment Bank proposals will be not enough, but he said that it is the job of environmental NGOs to lobby for more ambitious policies. He also called on investors to take advantage of the certainty provided by the new carbon budgets, Green Investment Bank, and Green Deal scheme to increase funding for low-carbon projects.