Nick Clegg unveils long-awaited details of green investment bank

Bank will be making green investments within a year and will have independence from Treasury control The UK’s green investment bank will be investing in UK low-carbon infrastructure projects within a year, and is expected to have assisted in injecting £15bn into the green economy within four years, Nick Clegg told a meeting in the City of London on Monday. The deputy prime minister cheered investors by setting out key concessions when announcing the details of the long-awaited new bank, the government’s flagship green policy , which is intended to provide the capital to transform the UK to a low-carbon economy. He said the bank would be set up under legislation, to give it independence from ministers – a major concern for investors, who feared that Treasury plans to avoid legislation and retain control over the bank would spell years of damaging political interference. He also reassured companies that the bank would be able to borrow from April 2015. Clegg said: “We are determined this organisation will be part of the institutional architecture of this country. The green investment bank will go from an idea to a flow of investment in under two years, and quickly grow into an independent investing, and then borrowing, institution. A real legacy of the coalition government’s green commitment.” The initial £3bn of funding from the public purse would also be protected, rather than being subject to the proceeds from asset sales, Clegg said. There had been fears that if planned asset sales did not raise the amounts expected, the bank could suffer. Now it has been underwritten by the Treasury, companies can start to make plans to apply for funding for green projects, including offshore wind farms, waste and industrial energy efficiency. In a further boost to green campaigners, the bank may be used to help finance the green deal scheme, by which householders will have access to loans to carry out energy efficiency refurbishment, paying back the loans in instalments through their energy bills. Campaigners had warned that the green deal would not work if private sector providers were able to charge commercial rates of interest on the loans, as the interest payments would outweigh the savings on energy bills. An independent board of governors for the bank is soon to be announced, with City rumours suggesting it will be led by Sir Adrian Montague, the chairman of 3i. Clegg promised that the bank’s independence would ensure it could “undertake a wide range of transactions, including equity, debt and risk mitigation products”. This would mean that its initial £3bn capital should, by 2014/15, “enable the bank to catalyse an additional £15bn of investment in green infrastructure”, he said. He said the bank would have borrowing powers from April 2015, but only if the government target for debt to be falling as a percentage of GDP had been met by then. Clegg was responding to a chorus of green businesses, investors and campaigners who had raised concerns over the green investment bank , urging ministers to give key assurances that cash will flow into the UK’s low-carbon economy . Rows among ministers anxious to keep control of the new bank have raged for months, with the Treasury tussling to keep the bank small and under its control. One of the options its mandarins had been pushing was that the bank should only be allowed to borrow money from the government, rather than from the private sector – an amendment that investors say would make a nonsense of the institution. Green economy Renewable energy Energy Green politics Fiona Harvey guardian.co.uk

Posted by on May 23, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.