The UK is set lose out on billions of pounds worth of investment in future green energy projects, warned the Chair of the Environmental Audit Committee.
Joan Walley MP, said: “If the Government is serious about being the ‘greenest ever’, the Chancellor must ensure the Green Investment Bank can do what it says on the tin and raise extra capital like a real bank. The UK desperately needs a game-changing injection of private sector investment if we are going to meet our climate change targets and move to a green economy.”
The Government promised to establish a Green Investment Bank in the Spending Review and pledged £1 billion to capitalise it. However, Government is yet to decide whether it should be a fully fledged investment bank, able to borrow money. If the Office for National Statistics classifies the bank as ‘public sector’, its borrowing might undermine the Government’s deficit reduction strategy.
A report from Ernst and Young has argued that establishing a proper investment bank is crucial to generating the necessary cash for the UK’s low carbon future.
The Environmental Audit Committee has decided that the bank should concentrate on new fledgling environmental investment where the market has yet to be established.
Joan Walley said: “Many new clean energy projects are viable, but can’t find funding because their novelty deems them risky in the eyes of banks and investors. The Government needs to clarify whether Green Investment Bank support for new nuclear would constitute a subsidy.”
As the Electricity Market Reform’s consultation came to a close yesterday, the energy industry was voicing concerns over where the finance for the UK would come from. Ms Walley said: “A fully fledged Green Investment Bank would be able to kick-start green growth in the UK by offering government backed ‘green bonds’ that would attract big investors.”