Plans by the UK Government to set up the world’s first Green Investment Bank (UK GIB) have been approved by the European Commission today. The Bank is now set to begin operations in the next few weeks.
State aid approval gives UK GIB the remit to make investments on commercial terms across a wide range of green economy sectors.
Scottish Secretary Michael Moore welcomed the decision of the European Commission to grant approval to the UK Green Investment Bank under EU State Aid rules.
Mr Moore said: “I am delighted that the UK Government has, after detailed discussions with the Commission, successfully made the case for the UK Green Investment Bank to start making investments in the green economy.
“This is another vital step towards the establishment of the Bank’s headquarters in Edinburgh and its office in London. Funded with £3bn of UK Government money, the UK GIB is an outstanding example of the many ways in which Scotland and the rest of the UK are stronger together, harnessing our combined strengths to make a real difference to the development of a low carbon economy across the UK.
“I look forward to the Bank getting up and running in the coming months, promoting the development of a green finance cluster in Scotland that will play a significant role in rebalancing the UK economy.”
Business Secretary Vince Cable said:
“This marks an important step. Funded with £3 billion of Government money and mobilising additional private capital, the UK Green Investment Bank has the potential to make a significant contribution to the development of a green economy. State aid approval gives the Bank the green light to expand investment in the UK’s green infrastructure.”
Earlier this year the Bank was established as a public company, UK Green Investment Bank plc. Following approval from the European Commission, final preparations are now in hand for the UK GIB to begin making investments.
Shaun Kingsbury, the Bank’s Chief Executive Officer, and six new non-executive directors will take up their positions on the Board on 29 October. The official launch of UK GIB will be at the end of November.
UK Green Investment Bank Chair Lord Smith said:
“This is excellent news and a very important milestone as we transition to a low carbon economy and work to boost investment across the industry. We have already made significant progress in building our teams and the necessary infrastructure for the Bank and we expect to be fully operational in the next few weeks. We clearly have challenges ahead but we have the people, the expertise and the capability to deliver on our priorities and create the foundation for a new climate of green investment.”
In the period before state aid approval for UK GIB, investments have been made on commercial terms by BIS¿s UK Green Investments team (UKGI). To date, UKGI has committed £180 million to specialist fund managers to co-invest equity in smaller waste infrastructure, energy from waste, and non domestic energy efficiency projects. Assets built up by UKGI will transfer to the Bank.
State aid approval by the European Commission sets out the structure and operating principles of the UK GIB and that it can make investments on commercial terms in the following sectors:
- Offshore wind
- Waste (treatment and recycling and energy from waste)
- Non domestic energy efficiency
- Biofuels for transport
- Biomass power
- Carbon capture and storage
- Marine energy
- Renewable heat