A Green Investment Bank is being set up to fund clean energy and low carbon projects

Fears that Green Investment Bank won't be able to borrow until 2015

Campaigners calling for a Green Investment Bank to kick-start low carbon growth say they fear the Treasury will not let the bank borrow money until 2015.

It is hoped the promised bank will leverage billions of pounds in private finance to fund clean energy and low-carbon projects.

But the setting up of the Government-backed institution has been dogged by disagreement within Whitehall about whether or not it should be a bank able to raise its own capital, amid concerns its borrowing could undermine efforts to cut the deficit.

Ahead of this week's Budget, Ed Matthew, director of campaign group Transform UK, said he expected the Treasury to announce that the bank would be able to borrow - but not until 2015.

He said the bank was due to be up and running by September 2012, and urged the Government to set a cap on borrowing when it is first operational rather than imposing a delay on its ability to raise capital.

“The power to borrow is what gives the Green Investment Bank the ability to leverage in the private investment required to spark low carbon growth and de-carbonise our energy system.

“If they clip the wings of the Green Bank so it can't fly, where is the growth going to come from? Are they going to magic it out of thin air?

“It seems extraordinary that in terms of delivering a ‘Budget for Growth’ the Government can't even do something everyone wants.

“We are in a clean-tech race with the rest of the world and the Treasury seems determined to lose,” Matthew said.

Earlier this month, the Environmental Audit Committee (EAC) called for the institution to be a “real bank” and not just another fund for distributing Government money.

MPs said the bank must be able to raise private finance to plug the multibillion-pound gap in investment needed to drive the shift towards green technology such as renewable energy.

Green Party MP Caroline Lucas said there were “rumours that the Treasury are moving to crush the Green Investment Bank ahead of the Budget on Wednesday, by stating that it will not be allowed to borrow until 2015”.

“Although the Treasury may agree in principle that the Green Investment Bank can borrow eventually, to stop it borrowing for four years means it will be merely a fund for that time.

“To clip the Green Investment Bank's wings at exactly the time it needs to fly would be daft. It would put growth and low carbon budgets in serious jeopardy,” Lucas said.

Recent articles

Info Message

Our sites use cookies to support some functionality, and to collect anonymous user data.

Learn more about IET cookies and how to control them