The UK's first 'green investment bank' launches
By Rebecca Burn-Callander Wednesday, 28 November 2012
Vince Cable has declared the new £3bn green investment bank (GIB) 'open for business'. It's aim: to fund green and sustainable projects.
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It’s been two years in the making, but the business secretary has finally cut the red ribbon on his green investment bank, a £3bn government fund that will back firms in the renewable energy, carbon capture and storage and energy efficiency industries. It's new CEO, Shaun Kingsbury, hails from Hudson Clean Energy Partners, a private equity firm specialising in this space.
Vince Cable has announced that the bank, which is headquartered up in Edinburgh, ‘will place the green economy at the heart of our recovery and position the UK in the forefront of the drive to develop clean energy.’ Not, as MT’s overactive imagination suggested, dole out loans in leaves and rose petals from a tree house in The Meadows.
Cable has already cherry picked a couple of businesses to receive the first loans from the GIB. A panel-making factory in north Wales is to receive £5m to undertake a major retrofit of its old machinery. A further £8m will also be spent on building a new anaerobic digestion plant in Teeside (don't ask). Fitting that government has chosen to fund a project which produces a large amount of hot methane…
Cable reckons that the GIB could attract substantial investment from private funds too, kickstarting the economy and plumbing those stagnant pools of untouched cash on company balance sheets. Indeed, private investors have already raised a further £8m for that anerobic digestion plant. And with six more plants to be built over the next five years, a lot more money could be injected into the green business ecosystem.
But the GIB is more than just a new funding vehicle; it is also a political power play. Cable has made a great song and dance about choosing Edinburgh for the bank’s HQ - ‘Having the headquarters in Edinburgh is a powerful vote of confidence in the Union, and a testimony to our commitment to helping Scotland lead the green revolution’ – and it’s clear he hopes that the decision will weaken support for the pro Scottish independence SNP, led by Alex Salmond. Although, some politicos have noted that it seems the cynical Southerners don’t have complete faith in them up North: the GIB is also being given a large office in London.
With the price of oil fluctuating wildly, and Britain lagging well behind in its carbon reduction targets, many hopes are pinned on this green bank. But given government’s track record managing banks (staggering losses on the sale of Northern Rock, anyone?), it’s too soon to start breaking out the locally-sourced Nyetimber sparkling wine and pole-caught tuna sandwiches…