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Potentially GBP18 billion in Green Investment Bank Funds for Industrial and Commercial Buildings
The UK Government has released a Progress Report that provides details about the Green Investment Bank which will be important for the success of the Green Deal announced recently. The Green Investment Bank, which is touted as being the first national bank in the world dedicated to the green economy, will be also be key to the success of other projects aimed at helping the UK reach its goal of reducing carbon emissions a total of 50% by 2025.
Vince Cable, Business Secretary, summed up the initiative this way: “The lack of available finance could be a limiting factor. Detailed research and market analysis has established the need for an institution to address market failures which are constraining the flow of finance The proposals published today set out a vision for a new and enduring institution – the world’s first dedicated national green investment bank - to complement the existing policy landscape.”
Though the details of where the funds will be funnelled have yet to be finalized, by all appearances the priorities will be non-domestic energy efficiency, offshore wind, and waste. Up to £4.5 billion may be allocated specifically for small and large commercial and industrial building projects.
In a speech regarding the new Green Investment Bank, Deputy Prime Minister, Nick Clegg, provided some hints as to the structure of the institution:
- Legislated operational independence that’s part of the institutional architecture.
- £3 billion for initial capitalisation through asset sales and other sources that should enable the bank to catalyse an additional £15 billion of investments in green infrastructure.
- Investments will be made starting April 2012, including investments into the Green Deal program.
- The Bank will have a fully operational independent board that can oversee equity transactions as well as debt and risk mitigation products, among other transactions.
- Starting April 2015, the Bank will have borrowing powers.
The UK-GBC welcomed this announcement, saying, “Not only has Government recognised how important legislation is, Ministers have rightly linked the Green Investment Bank with the need for low cost finance to ensure the Green Deal delivers a home refurbishment revolution in the UK."
