UK Green Investment Bank – going overseas, moving private

David Symons
18 June 2014

Twitter FacebookLinkedIn

Print

Topics 

Business

Sustainability

Getting the GIB to lead UK overseas climate fund investment would be a positive step forward in development of the bank and UK overseas aid, says David Symons.

The Green Investment Bank has made a strong impact since it got off the ground.  It has invested around £1.3bn in 25 UK low carbon projects, from offshore wind to hospital energy efficiency retrofits, from anaerobic digestors to LED streetlight conversion projects. 

This £1.3bn has also helped lever an additional £3.3bn of investment from the private sector – investment which, if the bank sticks to its brief, wouldn’t have happened without the GIB’s skin in the game. 

"Asking the GIB to provide the commercial application and the commercial support to renewables and carbon reduction projects harnesses the power of the private sector too and will make the money go further."

So the announcement last week that the UK Government has asked the GIB to ‘explore the potential’ for it to lead the overseas investment by the UK’s International Climate Fund is a welcome extension of its remit. The Climate Fund was a fund committed by the UK Government to help developing countries adapt to climate change and promote cleaner, greener growth.  Of the £3.87bn committed between April 2011 and March 2016 around 30% is earmarked for low carbon development.

Asking the GIB to lead this investment is a growing up of the international aid sector.  In the past the Department for International Development (DfID) would provide the grants and they’d be spent – very well meaningly and with good oversight.  And this type of aid won’t go away any time soon.  But asking the GIB to provide the commercial application and the commercial support to renewables and carbon reduction projects harnesses the power of the private sector too and will make the money go further.

There’s plenty of investors eager to invest in overseas renewables and the skills and governance of the GIB will make this happen faster and provide investor security. It also exports one of the coalition’s strongest green initiatives and helps extend the impact the Bank has had to-date – reported so far to be the equivalent of providing renewable energy for 2.9 million homes, saving the CO2 from 1.5million cars and cutting 1.3 million tonnes of waste from landfill.

It also heralds the progressive move of the bank to a structure similar to the German development bank, KFW.  That is further away, but expect the UK Government to begin introducing private equity to GIB shortly.   Which is also good news for the environment and good news for British business.

David Symons is WSP environmental director