Uk Green Investment Bank

							                                 Uk Green Investment Bank


The Parliamentary Information Office has been monitoring progress towards the set
up and implementation of the UK Green Investment Bank following the Energy Act
last year

The UK is to set up the world’s first investment bank solely dedicated to greening the
economy.
The initiative is part of the Government’s commitment to setting the UK firmly on course
towards a green and growing economy, while also delivering long-term sustainable growth.

This transition to a green economy presents significant growth opportunities for UK-based
businesses, both at home and abroad.

It will require unprecedented investment in key green sectors - an estimated £200 billion is
needed for the energy system alone over the period to 2020.

The UK Green Investment Bank (GIB) will be a key component of the progression towards a
green economy, complementing other green policies to help accelerate additional capital into
green infrastructure.

Its mission will be to provide financial solutions to accelerate private sector investment in the
green economy. Capitalised with £3 billion, the GIB will play a vital role in addressing market
failures affecting green infrastructure projects in order to stimulate a step up in private
investment.
It will build the necessary deep expertise in financial markets and green investments,
working towards a ‘double bottom line’ of both achieving significant green impact and making
financial returns.

Following best practice, the UK Green Investment Bank has been established under the
Companies Act and will operate at arm’s length from government.

The Government expects to obtain state aid approval for the GIB by autumn 2012. In
advance of this, the Government will begin making investments in green projects from April
2012.

The GIB is one of a number of key policies designed help meet environmental objectives
and promote economic growth. Other initiatives include the creation of a National
Infrastructure Plan, reforms to the electricity market, changes to the climate change levy, the
introduction of a renewable heat incentive, the review of waste policy and the reviews of
Ofgem and Ofwat.

Several non-green specific policies also support our growth and environmental objectives,
including banking reform, support for early stage innovation and skills provision.

Delivery schedule
The UK Green Investment Bank project will evolve over two phases, preceded by a
programme of preliminary Government investment in green infrastructure.

   Preliminary phase: UK Green Investments – from 2012 until state aid approval for GIB is
    granted, BIS’s UK Green Investments team will make direct investments in green
    infrastructure projects
   GIB establishment – GIB will be established as a stand-alone institution following state-
    aid approval. It is expected that state aid approval will be granted by autumn 2012
   GIB full borrowing – from April 2015, the GIB will be given full powers to borrow, subject
    to public sector net debt falling as a percentage of GDP and further state aid approval
    being granted.

Project Governance
The Department of Business, Innovation and Skills is leading the Government’s work to
develop the UK Green Investment Bank. It is working with a number of other government
departments including the DECC, DEFRA, HMT, DfT, CLG and Infrastructure UK.

And in May this year the UK Green Investment Bank (UK GIB) moved a step closer to going
live. The Business Secretary announced the formation of the public company and the
appointment of its top directors.

Lord Smith of Kelvin will be the new Chair of UK Green Investment Bank plc. Currently Chair
of SSE and The Weir Group, he has a strong financial services background, chairing the
group set up by the Financial Reporting Council in 2003 to clarify the role of audit
committees.

Sir Adrian Montague has been appointed as Deputy Chair and Senior Independent Director.
Sir Adrian, who is chair of companies including 3i and Anglian Water Group, has been
chairing the GIB Advisory Group and has been closely involved with the development of the
bank.

Business Secretary Vince Cable said:

"The UK GIB is a major new innovation vital to securing investment in what is one of the
great challenges of our age, the decarbonisation of our energy supply. It has found two
candidates of outstanding calibre well suited to leading the bank through its important early
phase."

Lord Smith said:

“It is a pleasure to be asked by the Business Secretary to chair this groundbreaking
institution. I look forward to working with Sir Adrian Montague and can’t wait to get started.”

Deputy Prime Minister Nick Clegg said:

"Lord Smith and Sir Adrian bring significant expertise and strong track records of delivery.
Britain is already a powerhouse in green industries, but we are still not tapping all of our
potential. I am determined that the Government will do everything it can to support this
burgeoning sector and set the UK firmly on course towards a green and growing economy.
The UK GIB will play a key part in this."

Scottish Secretary Michael Moore said:

“The UK GIB is set to play an essential part as we build and invest in a greener future. This
is a UK institution headquartered in Edinburgh supported by a strong team in London and
the news that Lord Smith and Sir Adrian Montague have been appointed is another step
towards the bank opening for business. They bring a wealth of experience to the roles and
will bring that to bear as we look to encourage private sector investment in key energy
projects.”

The will begin the recruitment of the company’s other directors and senior executive team
shortly. The Board is aiming for a fully operational UK GIB this autumn, subject to state aid
approval from the European Commission.
Following these appointments, the Advisory Group chaired by Sir Adrian Montague will be
disbanded.

The UK GIB headquarters will be in Edinburgh, with an office in London to enable a greater
commercial reach nationally than could be achieved from one location.

The Enterprise and Regulatory Reform Bill includes legislation to set the Bank’s green
purpose, embed its independence and make funding provision for the Bank.

The Parliamentary Information Office will continue to report on environmental issues and
their impact on the UK as we go through the months ahead.

Web: www.parliamentaryyearbookinformationoffice.co.uk