The UK Green Investment Bank committed £668 million to 18 green projects for the financial year to 31 March 2014.
The number of new projects funded in 2013/14 is more than double the number GIB invested in its first year of operation and takes the bank’s total capital commitments to £1.3 billion. An additional £3.5 billion has been successfully committed from private investors.
The bank predicts that its current portfolio will reduce UK CO2 emissions by 3.5 million tonnes every year, generating 12.8TWh of renewable energy and avoid 1.3 million tonnes of waste from ending up in landfill. In addition, GIB claims that its existing portfolio will earn UK taxpayers an average return of 8% per annum.
Commenting on the annual results, business secretary Vince Cable said: “We established the UK GIB to jump start investments in cleaner, greener technology. These results show the impact they are having with £4.8 billion pumped into green energy projects in just 18 months.
“Headquartered in Edinburgh, the bank’s current investments have supported 3,500 jobs in the UK’s growing green economy and will cut CO2 emissions equivalent to taking over half the cars off London’s roads.”
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The government has also revealed that GIB is launching a £1 billion offshore wind fund that will aim to bolster the growth of the UK offshore wind sector. The fund aims to acquire equity stakes in operational offshore wind projects across the UK. Currently the offshore wind market has installed 3.6GW of capacity with a further 1,4GW in construction.
Commenting on the launch of the offshore wind fund, Cable added: “GIB’s plans for a dedicated offshore wind fund are a real boost for our industrial strategy in a sector where we have a strong competitive advantage compared to other countries. There are great opportunities for British companies and the industry has the potential to create 30,000 jobs for the UK.”
Shaun Kingsbury, chief executive of GIB explained that the latest round of projects were just the beginning of the bank’s role in the UK’s green sector, he said: “Our role goes well beyond that of a traditional investor. We are providing a positive demonstration effect by successfully committing capital to profitable, green infrastructure investments. We are making a difference across the UK by taking on the tough projects, de-risking new technologies and lowering the cost of capital for our sectors.
“We want to do more to maximise our green impact. We plan to extend our reach into new markets like community-scale renewables. And we plan to raise new capital for the first time through the creation of a new £1 billion fund for operating offshore wind assets.”
Greenpeace UK energy campaigner Louise Hutchins welcomed the results but warned that more could be done, she said: “One year on, the Green Investment Bank is clearly a success story, driving investment where it is needed in Britain’s cutting edge renewable industries. But the level of investment still doesn’t match Britain’s strategic requirements.
“George Osborne should now give the Bank freedom to borrow to invest at a much bigger scale, to modernise Britain’s decaying, polluting energy system and give a boost to the economy. The market is failing – the Big Six energy firms show no appetite for making the scale of investments needed to keep the lights on, cut energy waste and fossil fuel imports or meet our climate targets. There’s still room for improvement in their investment criteria – a green bank should have no role in backing unsustainable biomass – but the Bank’s new plans to boost offshore wind in the year ahead shows the right priorities.”
