The UK government is planning to establish a £2 billion Green Investment Bank (GIB) to deal with the ‘equity gap’ that threatens investments in low carbon projects. The scheme will be taking half of the needed fund from the sale of its Channel Tunnel assets. Meanwhile, the other £1 billion will be given by the private sector.
The investment bank will be open to every green initiative, but it will mainly focus on transport and energy projects. Offshore wind energy is expected to be GIB’s most urgent priority, as the UK races to install £100 billion-worth of wind farms to meet the country’s 2020 carbon emission target. The UK government is also raising £60 million for the expansion of ports that will host the manufacturers of wind turbines.
Chancellor Alistair Darling said that GIB will unlock billions of funds from the private sector. The finance will be allotted first for green transport and sustainable schemes – particularly for the offshore wind sector in which the UK is already leading.
Meanwhile, Infrastructure UK, which is tasked to manage the funds, will conduct a consultation regarding the proposed scheme this summer. The scheme was welcomed by environmental organisations, energy lobbyists and businesses yesterday.
But there was uncertainty whether the £2 billion support can make a significant impact on the £400 billion fund required to build the green infrastructure needed over the following 10 years. The head for global infrastructure of KPMG Nick Chism commented that a long-term investment strategy will have to contain new ways of cooperation between the public and private sectors.
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