By Renewable Energy Focus staff
In addition to the announcements made by Deputy Prime Minister Nick Clegg earlier this week, Cable stressed that the GIB’s mission will be to accelerate private sector investment in the UK’s transition to a green economy.
“This is an opportunity for the UK to lead the way in the transition to a low-carbon economy with the world’s first dedicated Green Investment Bank,” he told MPs.
The initial remit of the bank will be to focus on green infrastructure assets and to achieve “significant green impact” whilst ensuring financial returns.
The GIB will need approval by the European Commission before it can be established, but once approved, it will be enshrined in legislation confirming its independent status as an enduring institution.
Until investments can be transferred to the GIB, the Government will make direct, state-aid compliant investments in green infrastructure projects from April in order to ensure rapid progress.
The bank’s advisory group will be chaired by Sir Adrian Montague.
John Gibbs, Partner – corporate finance – at PricewaterhouseCoopers, comments: “[The] report is another step in the right direction for the Green Investment Bank. We welcome the general thrust of the report, not least because it begins to bring some clarity to the debate, particularly in terms of its sector focus, products and, crucially, the timetable for implementation.
“The emphasis on mobilising additional investment through mitigating risks and facilitating refinancing of senior debt has the potential to make a real difference, particularly in the immediate term to offshore wind, the sector of highest priority in the UK.”
Regen SW also welcomed Cable’s announcement. Merlin Hyman, CEO of Regen SW, said: “This is good news for renewables companies and good news for the economy as a whole, as it will give businesses and investors the confidence they need to invest in renewables.”
He adds: “…we called for the Government to create a bank that would finance projects at the initial higher risk stage, support aggregation of projects, and provide due diligence expertise. The lack of ability to borrow for four years is a major weakness but today’s announcements show the Government is moving in the right direction.
“However, for the bank to be truly effective it’s important it doesn’t take the simple option of investing in safe projects that would simply compete with bank finance. It must focus on leveraging the required private capital by financing commercially-viable projects at the earliest stages, where the highest risks are inherent.”