Yesterday’s announcement in the Spending Review that there would be £1bn allocated to funding a Green Investment Bank has been cautiously welcomed by industry players.
RenewableUK’s director of policy Gordon Edge said: “The announcement of the Green Investment Bank is an important signal of the government’s commitment to developing a low-carbon economy.
“However, it’s important to recognise that at the proposed level of capitalisation, the GIB will not have sufficient funding to support the hundreds of billions of pounds of investment necessary to construct the energy infrastructure the UK will require over the next two decades. It’s crucial that a stable policy framework is put in place to secure that investment from the private sector.”
That echoed a view of Bloomberg New Energy Finance chairman Michael Liebreich, who just an hour before the Spending Review was announced said: “The Green Investment Bank will be a billion here, a billion there, but we are just not talking about big money. We are not hearing figures of between £200bn and £400bn. We are just not on the right track now.”
Pricewaterhouse Coopers today said that while the bank is intended to facilitate movement in the area of low carbon infrastructure, “the limited funding proposed means that it will be essential for the GIB to be given a well focussed, targeted mandate rather than spread itself too thinly”.
Last week, advisory firm Ernst & Young estimated that the UK needs capital investment of £450bn through to 2025 if it is to meet its green energy goals. With only £50-80bn of capital available from current project finance and infrastructure funds, Ernst & Young said a green bank would be essential to cover the shortfall.