Green Investment Bank Open for Business
The government’s newly launched green investment bank (GIB) is aiming to raise £15bn of private investment in environmental initiatives by 2015.
The money is to be spent on projects such as carbon capture and green energy plants with a view to helping the bank achieve its aim of reducing CO2 emissions whilst growing the UK’s green industries. Funds from private sources will augment the £3bn being invested by the state.
At the bank’s official launch on Wednesday business secretary, Vince Cable, was able to announce the first two investments to be made; an £8m anaerobic digestion plant and a £5m refit to furnish a factory in North Wales with energy efficient technology.
Despite these positive initial steps, Cable has warned that the economic situation will make it hard to raise finance, whilst others have criticised the government’s decision that the bank will not be able to borrow.
Greenpeace’s policy director, Joss Garman said:
What we’ve ended up with is a poor cousin. The bank should be able to borrow now, rather than waiting until after the next election. Given full borrowing powers, the bank could be a key vehicle to help tackle climate change and get us out of these tough economic times. Such procrastination is hurting investment, jeopardising jobs and stymieing growth.
The bank’s ability, or lack thereof, to raise its target of £15bn will not be the only measure of its effectiveness. The GIB’s chief executive Shaun Kingsbury explained:
We will need to pull together a holistic set of measures. Certainly measuring avoided carbon is one of those but it’s not the only one […] what I promise to do over the couple of months is to work with our board to put that holistic set of measures together and we will be transparent and we will be publishing it and we will show how we’re going along.
Some controversy has arisen from the fact that the bank will only be investing in already established technologies, at the expense of new developments in tidal and wave energy. Kingsbury said:
We will not take high risk investments […] we won’t put money into places where perhaps venture capitalists might play [a role]. We won’t provide grants or soft loans and we won’t be lender of last resort.
Green Steve’s Reaction
My big hope is that much of the money is spent on energy efficiency measures as these are often the quickest to implement and the most cost effective in the long run.
We always seem to be a nation that builds more energy capacity instead of looking at the ways we can reduce energy consumption. It’s a bit like taking a bath without a plug – you have to keep the taps running constantly.
Leave a Reply
For every comment you make, I'll offset 30 car miles of greenhouse gas emissions!