Green Investment Bank

Green Investment Bank Standard Note: SNSC-5977 Last updated: 22 February 2013 Author: Dr Elena Ares Section Science and Environment Section This note covers the Green Investment Bank set up by the Government to support green infrastructure investment. Before the announcement of its creation in the March 2011 budget there was debate between departments on the form the Bank would take and the level of finance to be provided to it. In that budget it was announced the Bank would have an initial investment of £3bn and will not be allowed to raise its own capital until at least 2015. The Bank will be able to carry out a wide range of transactions - including equity, debt and risk mitigation products

- and is expected to catalyse an additional £15 billion of investment in green infrastructure by 2014/15. The Government published the five priority areas for investment for the bank during the current spending review period, together with the criteria for deciding on its location on 12 December 2011. It also announced the creation of an interim body, Green Investments UK, which would have £775 million available to invest from April 2012. The location of the Bank, Edinburgh and London, was announced in March 2012. Legislation that would enshrine the ‘green’ purpose of the bank, providing powers for it to operate including funding, and ensuring its operational independence from Government were announced in the Queens Speech, and included in the Enterprise and Regulatory Reform Bill published in May 2012. The European Commission approved state aid for the bank on 17 October 2012. It was then officially launched by Vince Cable at the Heriot-Watt University Conference Centre on 28 November 2012. This information is provided to Members of Parliament in support of their parliamentary duties and is not intended to address the specific circumstances of any particular individual. It should not be relied upon as being up to date; the law or policies may have changed since it was last updated; and it should not be relied upon as legal or professional advice or as a substitute for it. A suitably qualified professional should be consulted if specific advice or information is required. This information is provided subject to our general terms and conditions which are available online or may be provided on request in hard copy. Authors are available to discuss the content of this briefing with Members and their staff, but not with the general public. Contents 1 Background 2 2 Bank Structure, Priorities for Investment and Location 2 3 The Bill 4 4 Reaction to the Bill 7 5 State aid approval 8 6 Official Launch 8 1 Background The Green Investment Bank Commission was an independent body set up by the Chancellor of the Exchequer to advise government on the creation of a Green Investment Bank (GIB). It produced a report in June 2010 in which it highlighted the “urgent need for a new public financial institution to unlock the investment needed for the UK to deliver a timely transition to a low carbon economy”. 1 Despite support from the Government there was widespread speculation that there were...

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