09 Nov 2010 11:11:21
DECC confirms GIB will open in 2012
DECC confirms the Green Investment Bank will open in 2012
DECC business plan releases the timeline for green policy rollout, including the launch of the Green Investment Bank in September 2012
The Department of Energy and Climate Change (DECC) has published today a business plan that outlines its priorities over the next five years and establishes a timeline for the rollout of its key green policy measures.
The DECC business plan has been released along with similar plans for other Whitehall departments, and brings to an end months of speculation about the timeline for the coalition's flagship green policy measures, including the Green Investment Bank and the first carbon capture and storage (CCS) demonstration project.
According to the plan released by the Department of Business Innovation and Skills (BIS), final proposals for the Green Investment Bank will be released in May next year, and the staff and office systems will be in place by the end of 2011, following a planned launch in September 2012, when it will start lending.
The Green Investment Bank would initially be financed with the money raised through asset sales, while a further £1bn pledged in the spending review would be released by the Treasury in 2013.
Up to ten times more energy investment is required than is likely to be delivered by traditional financing sources
Less than a month ago, a report published by Ernst & Young stated that the UK is facing an energy funding gap of between £370 and £400 billion between now and 2025. This means that up to ten times more energy investment is required than is likely to be delivered by traditional financing sources. The report concluded that this gap could only be filled with the support of the Green Investment Bank (GIB) with a capitalization of at least £4 to £6 billion over the next four years.
The authors of the report named Capitalizing the Green Investment Bank argued that “In the absence of an institution such as the GIB, the UK low carbon sector will not be able to access institutional capital on the scale required” and that without it “significant competitive advantage in the low carbon economy may be lost”.
The release of the timeline is likely to be welcomed by businesses and green groups alike. However, the Green Alliance think-tank expressed concern that it was still “a long way off” until the bank will be able to start lending.
On the other side, an analyst at research firm Verdantix, Vanessa O'Connell, argued that while 2012 might seem a long way off, such a complex institution typically required several years to get established.