The UK government has renewed its commitment for a Green Investment Bank with a pledge of £1bn (€1.1bn), it was announced yesterday.
The new bank will fund clean energy and low-carbon projects and leverage private finance – a move that has been largely welcomed by cleantech investors. “[The bank will] help to generate the private sector investment that this country needs in order for the government to reach its target of 80 per cent reduction in emissions by 2050,” said Jamie Richards, chief executive of Foresight Solar.
However, many industry figures hoped for a government investment of around £6bn. There are also lingering doubts about the bank’s operations.
Richard Henderson, managing partner at MTI Partners, urged Chancellor George Osborne to follow a financially driven investment strategy, adding: “The developers of early-stage green technologies often find little use for loans, and make much better progress with equity-led investment from VCs, who are able to add value alongside cash.”
In addition to the plans for the bank, around £200m of government money has been earmarked for offshore wind, wave and tidal technologies, and a further £60m will be used to build ports in the North East that can support the construction of large turbines. Another £1bn will be invested in carbon storage technologies.
Feed-in tariffs, which guarantee a set price for electricity generated from renewable sources, were implemented earlier this year and will continue at current rates until 2013.