An influential Parliamentary Committee today concluded that the Government must set up a proper Green Investment Bank with the power to issue Green Bonds if it wants to reap the benefits of green growth and meet the UK’s climate change targets.
The findings of the investigation by the Environmental Audit Committee into the Green Investment Bank come less than two weeks before the Budget when the Government is expected to announce whether it will be a proper bank or just a fund.
The Committee’s report concludes:
For us, a red-line is that the Green Investment Bank is a bank, explicitly charged with a specific green investment purpose and backed by government, that is able to lever in the large sums needed to deliver the hundreds of billions of pounds of required green infrastructure.
The Coalition Agreement promised to establish a Green Investment Bank and the Chancellor pledged £1 billion to capitalise it in the Spending Review, plus unspecified proceeds from the sale of government assets.
Evidence presented to the Environmental Audit Committee by energy companies, NGOs and financial institutions suggests that between £200 billion and £1 trillion of private sector investment is needed over the next 10-20 years if the UK is to meet its climate change and renewable energy targets. Accountants Ernst and Young told the inquiry that traditional sources of private sector capital are only likely to deliver £50 – £80 billion of investment in energy infrastructure by 2025 – leaving the UK with a massive investment shortfall.
The report argues that establishing a proper Investment Bank is crucial in order to lever in the unprecedented levels of private sector investment needed.
Ed Matthew, Director of Transform UK, who coordinates the national alliance for a Green Investment Bank said:
Today the Environmental Audit Committee put a price on success – a proper Green Investment Bank could leverage hundreds of billions in vital investment. This is the shot in the arm the UK economy needs. The only cost the Treasury should consider is the cost of failure to unleash this institution’s massive potential to re-power our economy.
Transform UK is calling on the Government to confirm at the Budget that :
- The GIB will be a proper bank with the power to borrow.
- The GIB will have the power to issue bonds with Government guarantee.
- The GIB is given at least £4 billion of initial capitalization.
- The GIB prioritises investment in renewables & energy efficiency.
- That legislation will be brought forward at the end of 2011 to set up the GIB in law to ensure it is effective, accountable and transparent and fully operational in 2012.
For further information please contact Ed Matthew, Director of Transform UK:
Tel: 07827 157906 / Email: firstname.lastname@example.org
Notes to Editors:
EAC Report: To access the full report on the Green Investment Bank by the Environmental Audit Committee is available please contact the Committee’s media officer Nicholas Davies on 020 7219 3297 / 07917 488 141
Transform UK campaigns for solutions to accelerate investment into the low carbon economy. Transform UK founded the campaign for the Green Investment Bank in February 2008 and coordinates the national alliance of NGO’s, Unions, Business and Investors seeking to create an ambitious institution that will play a successful role in cutting greenhouse gas emissions and generating green growth.