Climate Action

UK Green Investment Bank: Out of the red and into the green

Nick Clegg has outlined the Government’s vision for the future of its flagship Green Investment Bank, describing the scheme as “a real legacy of the Coalition Government's green commitment”.

  • 23 May 2011
  • Websolutions

In a speech given today, Nick Clegg outlined the Government’s vision for the future of its flagship Green Investment Bank.

The bank is to open next year, with an initial fund of £3bn. This sum will largely be raised through the sale of government assets and it is hoped that this initial investment will enable the bank to catalyse an additional £15 billion of investment in green infrastructure.

This news comes against the backdrop of today’s announcement that banks have failed to meet business lending targets for the first quarter of 2011, thus stifling UK economic growth.

Clegg described the Green Investment Bank as “a real legacy of the Coalition Government's green commitment”. He went on to say: “There are capital funds that want to invest in the green economy, and firms bursting to grow but desperate for funds. The role of the Green Investment Bank is to close the gap between the two. Smart investment from the Bank will catalyse much greater investment from the capital markets.”

Clegg was, however, keen to stress that the transition to a sustainable economy cannot be pushed through unilaterally by Government, saying: “The Government cannot create a green economy by itself. Only business and investors can do that. We need you to embrace these changes and seize the opportunities they present.”

Despite this passionate rhetoric, Clegg’s speech has been criticised by industry insiders, who had been hoping for more concrete details. Nathan Goode, Energy, Environment and Sustainability Partner at Grant Thornton UK LLP, said: “This announcement is an important step forward, but we were expecting more detail on the scope of the Green Investment Bank.”

Last weekend, speculation emerged that Sir Adrian Montague had been chosen by the government to oversee the Green Investment Bank’s initial advisory stage. Montague is currently the chairman of 3i and has formally been chairman of British Energy and deputy chairman of Network Rail. According to Sky News City editor Mark Kleinman, Montague is seen as “a known quantity in Whitehall”.  It has also been speculated that Vince Cable has played a major role in securing Montague for the role.

 

Nick Clegg's speech in full

Green Guides: The UK Green Investment Bank

Image: epSos | flickr