“The Green Investment Bank (GIB) already had £1bn of funding and now gets an extra 75%. However, that 75% comes at a price as it will not be able to borrow and raise capital for another four years, as confirmed by the Chancellor of the Exchequer George Osborne. So the GIB gets £3bn, which will be paid for through public asset sales. Is that enough for what was previously said to be one of the coalition government’s central manifesto component parts? Is the ‘greenest government ever’ rescinding on its promise? The government itself has said that it estimates (conservatively!) that more than £110 billion needs to raised to fund new power stations and grid upgrades over the next decade in order to cut emissions by 34 per cent by 2020. So, put into that context, the GIB gets less than 3% of the funds required for that purpose.
The 2011 budget was intended to be about ‘growth’ and ‘fairness’. It certainly is fair that the GIB was not scrapped altogether, which is what might have happened, according to the rumour mill back in July 2010. Will tripling the GIB budget allow enough room for growth? That remains to be seen but is unlikely. Positive noises are being made about the bank opening as early as next year, a year earlier than previously planned. However, it won’t be given any borrowing power before 2015-2016, subject to the national debt being reduced. Which is one way of saying that the jury is still out as to whether the GIB acts as a fund to support Britain’s low carbon infrastructure programme or whether it acts as a real bank.”
Mark Blackburn, co-founder and chief technology strategist, 1E