But Green Investment Bank will not be able to raise private funding until 2015
Chancellor George Osborne has unveiled £3bn of funding for a new Green Investment Bank in today’s budget.
However, Osborne has confirmed the bank will operate simply as a fund until 2015, when it will assume powers to raise its own borrowing on the private market.
Infrastructure players and green lobby groups have been calling for the bank to be given free rein to raise funding, but the Treasury is nervous of allowing anything which will impact on the government’s borrowing figures. Disappointment that the bank will not be allowed to borrow for four years will be offset by a larger than expected fund of £3bn.
George Osborne said in his budget statement that the bank would become fully fledged in 2015-16 “if we meet our debt commitments”.
Previously Osborne has set aside just £1bn for the bank.The Guardian reported today that the bank will also be open to lend from 2012-3, rather than 2013-4 as previously stated. It said funds will be diverted to the bank from the sale of London-Channel Tunnel rail link High Speed 1, thought to be worth £775m, and sales from the government’s stake in enriched uranium supplier Urenco, worth £1bn.
The Green Investment Bank is designed to provide high-risk early funding for low carbon infrastructure projects, such as the construction of off-shore wind farms.