By Marcus Leach
Vince Cable, the Business Secretary set out today (Tuesday 24 May) his vision for the Green Investment Bank (GIB) as a new and enduring institution to complement existing green policies.
Vince Cable published a progress report on the GIB setting out more detail on its governance and business model.
The GIB’s mission will be to accelerate private sector investment in the UK’s transition to a green economy. It will play a vital role in addressing market failures which are holding back private sector investment.
Sectors likely to be eligible for intervention initially include offshore wind, non-domestic energy efficiency and waste. Work is ongoing to explore other sectors which will change over time.
Its initial remit will be to focus on green infrastructure assets and on the twin objectives of achieving significant green impact and making financial returns.
As the bank will need to be approved by the European Commission before it can be established, there will be a phased approach. Once it has been agreed, the GIB will be enshrined in legislation confirming its independent status as an enduring institution with a key public role.
In order to make rapid progress, the Government will make direct, state-aid compliant investments in green infrastructure projects from April 2012 until these investments can be transferred to the GIB.
The Business Secretary is also setting up an advisory group to provide strategic direction of the GIB. Today it was announced that Sir Adrian Montague will chair this group of independent finance experts.
“This is an opportunity for the UK to lead the way in the transition to a low carbon economy with the world’s first dedicated Green Investment Bank," Vince Cable said.
“The GIB will become a key component of this transition which needs significant investment over the coming decades.
“I’m delighted that Sir Adrian Montague has agreed to chair the advisory group. He has a wealth of experience that will help with the strategic direction of the GIB.”
Sir Adrian Montague, chair of the advisory group said: “The Green Investment Bank is a genuinely radical innovation. The keys to the GIB's success are going to be precise targeting and brilliant execution.
“It is both a privilege, and an irresistible opportunity, to have been asked by the Secretary of State to chair the new institution's Advisory Board. My first task is to advise on the membership of the Advisory Board. The GIB needs the best people in order to get off to a flying start.”