Nicky Morgan MP welcomes Government’s increased funding for Green Investment Bank

 

Chancellor George Osborne MP’s statement that initial funding of the Green Investment Bank (GIB) is to be trebled to £3billion and the launch brought forward to 2012 is welcomed by Nicky Morgan MP, chair of the Westminster Sustainable Business Forum’s GIB programme. 

 

Mrs Morgan said: “Speaking on behalf of the Westminster Sustainable Business Forum, we welcome the Government’s renewed commitment to the Green Investment Bank. There is a broad consensus across industry and investors that we need, desperately, to invest in infrastructure to ensure the UK can make the transition to a low carbon economy. As such, the increase in initial funding from £1 to £3 billion is both timely and necessary”. 

 

The Government’s intention is for the GIB to play a central role in driving the huge investment in low carbon infrastructure - £370billion by 2025 according to Ernst & Young – necessary to make the UK a low carbon economy. The bank would allow investors to raise money for clean energy and low carbon infrastructure projects that commercial lenders perceive as too risky. 

 

In today’s budget statement, the Chancellor announced that the initial capitalisation of the Bank will be £3billion, far higher than the £1billion figure outlined last year. The Government hopes to raise the additional funding from the sale of assets such as the high-speed rail link between London and the Channel Tunnel. 

 

The launch of the GIB will also be brought forward a year from 2013. The Government now intends for the Bank to be operational by 2012.

 

The Chancellor also announced that the GIB will be allowed to borrow money, but only from 2015. The point around whether the GIB should be a fund, relying on Government funding, or be able to borrow money and raise further capital as a fully fledged investment bank, has been a contentious one. The Environmental Audit Committee argued for the latter in a report in March. The Treasury has objected saying the GIB’s borrowing would appear on the Government’s balance sheet as debt, and undermine its deficit reduction strategy.