the UK Green Investment Bank
The UK is to set up the world’s first investment bank solely dedicated to greening the economy.
The initiative is part of the Government’s commitment to setting the UK firmly on course towards a green and growing economy, while also delivering long-term sustainable growth.
This transition to a green economy presents significant growth opportunities for UK-based businesses, both at home and abroad.
The green investment bank intended to attract billions of pounds in funding for new renewables projects will be run from Edinburgh, in a move designed partly to bolster the case against Scottish independence.
Vince Cable, the business secretary, announced that the new bank, expected to employ between 50 and 70 people, would have its headquarters in Edinburgh, but will also operate a large fundraising office in London to exploit the City's financial clout and global reach.
This transition to a green economy presents significant growth opportunities for UK-based businesses, both at home and abroad.
It will require unprecedented investment in key green sectors - an estimated £200 billion is needed for the energy system alone over the period to 2020.
A non-partisan, House of Commons committee on climate change was established to study and recommend ways of meeting the country's obligations. The committee reported that for a new, low-carbon business and government infrastructure to be established, the necessary investment would range between £200 billion and £1 trillion over the next two decades.
In the Budget, the government guaranteed that the bank would receive an initial capital of £3bn.
The UK Green Investment Bank (GIB) will be a key component of the progression towards a green economy, complementing other green policies to help accelerate additional capital into green infrastructure.
Choosing the Scottish capital to strengthen the UK was "a good argument anyway" since it supported "the wider narrative that the UK has a lot going for it".
Suspicions that the decision was partly politically motivated were reinforced after Michael Moore, the Scottish secretary, said that sharing its operations between Edinburgh and London underlined the significance and interdependence of the whole UK energy market.
As Alex Salmond builds his case for Scottish independence by highlighting Scotland's significant green energy potential, UK ministers have been arguing that independence would harm new investment by undermining the pan-UK energy framework and removing the UK government's crucial public subsidies.
The government announced that Lord Smith of Kelvin will be the new chair of UK Green Investment Bank plc, at the same time confirming that the institution has now been formed as a public company.
Lord Smith is currently chair of SSE and The Weir Group and is an experienced senior executive and financier, having previously served stints at vice chairman of Deutsche Asset Management and chief executive of Morgan Grenfell Asset Management.
The GIB is one of a number of key policies designed help meet environmental objectives and promote economic growth. Other initiatives include the creation of a National Infrastructure Plan, reforms to the electricity market, changes to the climate change levy, the introduction of a renewable heat incentive, the review of waste policy and the reviews of Ofgem and Ofwat.
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