Plans for a green investment bank were outlined by Deputy Prime Minister Nick Clegg in London today.
The green bank will start investing in areas such as offshore wind, waste and non-domestic energy efficiency from April 2012, Clegg told the Climate Change Capital. The bank could also be used to support the early stages of the “green deal” to make homes more energy efficient, he said.
Clegg pledged the Government would bring forward legislation to ensure the “independence and enduring nature of the bank”.
The green bank will have full operational independence “as soon as possible”, he said, and had a guaranteed £3 billion from the Treasury as initial capital. It will also have borrowing powers from April 2015 as long as the target for Government debt to be falling has been met, he confirmed.
Clegg made the announcement after campaigners who want to see the bank created to help unlock billions of pounds for low carbon technology said it must be a permanent institution that can borrow from markets.
Campaigners who have been fighting for a bank as part of efforts to green the UK economy have voiced concerns that the Treasury is undermining the plans for the institution.
They want to see the bank enshrined in law and given explicit powers to borrow from the capital markets - without which, they say, it will not be able to deliver the needed investment in low carbon technology. They believe legislation to set up the bank will give it permanence and operational independence which will raise investor confidence.
Clegg said legislation would ensure a long shelf life for the bank, which would form a “vital” part of the Government’s bid to seize the opportunities of the green economy. He said investing in a greener future “is an ambition that combines an ethical duty and an economic opportunity”.
“The establishment of the bank represents a world first. Most countries have a development bank. But the UK will be the first country in the world to have a national bank dedicated to the green economy,” 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. A real legacy of the Coalition Government’s green commitment,” Clegg said.
See a report from the IET on the Green Investment Bank