The Business Secretary, Vince Cable, has today declared the Green Investment Bank (GIB) open for business. The Edinburgh and London-based bank will have access to £3 billion of public funding and is designed to kick-start private investment in green technologies as the UK moves to a low-carbon economy. However, the bank will be unable to borrow money until 2015, a constraint some have said will limit its usefulness.

Speaking at the official opening, Cable said: “The Green Investment Bank – a key coalition pledge – is now a reality. It will place the green economy at the heart of our recovery and position the UK in the forefront of the drive to develop clean energy.

“Three billion pounds of government money will leverage private sector capital to fund projects in priority sectors from offshore wind to waste and non domestic energy efficiency, helping to deliver our commitment to create jobs and growth right across the UK. Having the headquarters in Edinburgh is a powerful vote of confidence in the Union, and a testimony to our commitment to helping Scotland lead the green revolution.”

Cable also revealed that GIB has already made its first investments – committing £8 million to support an anaerobic digestion project in the North East and investing £5 million to retrofit Kingspan’s UK industrial facilities with energy saving measures.

Gaynor Hartnell, Chief Executive of the REA, welcomed the first investments, stating: “We are pleased that the first investment is a bioenergy project.  We hope that biomass and waste-to-energy – as well as offshore wind – will form a significant component of the Bank’s activity.  It is important to get as much leverage as possible from the initial £3 billion and investment in a diverse portfolio of renewable technologies will be helpful.  As the Bank’s funding expands in future, it would be fantastic if it could follow in the footsteps of the German state-owned bank KfW.”   

Ben Caldecott, Head of Policy at Climate Change Capital, welcomed the announcement but warned that the GIB “must align its work closely with other government initiatives, such as the £50bn UK Infrastructure Guarantee Scheme. Much could still go wrong, not least government reneging on its promise to give the GIB borrowing powers. But we remain confident that this will be an enduring institution, able to have significant impact and working in the national interest over many years to come.”

The Secretary of State for Energy and Climate Change Edward Davey concluded: “The GIB will help attract the capital required to allow the green economy to blossom, encouraging investors to market and kick-starting low-carbon and energy efficiency projects.

“In combination with our electricity market reforms, there will be lasting economic benefit as a result, with new expertise and jobs created, that will give the UK a competitive edge.”