Government eyes new green investment bank

Emma Gatten
·2-min read
The finance could be used to fund energy efficiency measures in buildings 
The finance could be used to fund energy efficiency measures in buildings

The Government is close to creating a new state-backed green investment bank to drive the development of low carbon infrastructure, energy minister Kwasi Kwarteng has said. 

Speaking at an event earlier this week Mr Kwarteng said he expected an announcement “in the not too distant future.”

Mr Kwarteng said there had been “broad discussion within Government about how we can in effect create the Green Investment Bank 2.0”.

He said such a body would need serious consideration if the UK had “any chance” of meeting its statutorily binding commitment to be net zero in carbon emissions by 2050. 

The first green investment bank was established under the Conservative-Lib Dem coalition and sold to Australian investment bank Macquarie Group in 2017 for £2.3bn.

It drove early investment in offshore wind, which now generates 10pc of UK electricity. 

Mr Kwarteng’s comments come amid growing calls for a national investment bank to finance infrastructure projects such as home energy efficiency measures or improving access to electric vehicles.

He was speaking at an event organised by UK100, a network of local leaders, which has said £5bn of development funding could be used to unlock £100bn worth of schemes. 

That would include £40bn for energy efficiency measures – far exceeding the Conservative manifesto pledge of £9.2bn. 

UK100 has suggested a new green investment bank have a more involved development role compared to its previous iteration, which Mr Kwarteng suggested was on the cards. 

A recent report from the Aldersgate Group and the Grantham Institute at the London School of Economics called for £5bn in capital to be spent over four years. 

The report said state-backed investment could help provide jobs in the near term for “shovel-ready” projects.