It won’t try to sell you payment protection insurance, offer you a mortgage, or ply you with loans and credit cards. But if you’re looking to find your way in the growing low-carbon sector the UK’s latest bank might just be worth a call.
Yes. The coalition’s much-vaunted Green Investment Bank (GIB) is officially open for business.
Formally launched this morning by Business secretary Vince Cable, the bank is making £3 billion of government money available for projects in a range of low carbon sectors. The coalition - for which the bank is now its flagship green policy - hopes that if the government demonstrates it’s serious about backing low carbon technologies, private investors will follow suit and match state funding.
Speaking at the bank’s Edinburgh headquarters Cable said that the bank will place the green economy at the heart of the recovery and help put the UK at the forefront of the development of the low carbon technology. He also revealed that that the bank has made its first investment since becoming operational, committing an initial £8 million to the construction of the UK’s largest anaerobic digestion plant in Teeside, an investment that he claimed will be matched by further £8 million of private sector funding. The bank is also investing £5 million in boosting the energy efficiency of facilities run by construction material manufacturer Kingspan.
A number of high-priority areas have been identified, including offshore wind, waste treatment and energy from waste technology and non-domestic energy efficiency systems. Unfortunately though, sectors perceived as being at an “earlier stage” such as marine and tidal power are unlikely to benefit from the fund. Ironically, marine and tidal power technology have been under development for many decades in the UK and the technology is well understood , but successive governments have been unwilling to give the sector the boost it so badly needs and it seems unlikely that these hugely promising areas will benefit from perhaps the most significant UK green energy policy for many years.
Nevertheless, The Engineer has long argued that the government must lead the way on emerging sectors. That in order to encourage private investment, it needs to show it’s serious. And despite the criticisms, the launch of the Green Investment Bank is a major step in the right direction that could prove a significant milestone in the growth of the UK’s low carbon sector. The coalition must now work rapidly to ensure that it sends the right signals to investors and that the funding is targeted at the right areas.