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UK treasury ‘clips wings’ of green investemnt bank, lobby group claims

23 May 2011 16:26:18 | edem

Offshore wind, waste to energy, and non-domestic energy efficiency will be early priorities for the UK's Green Investment Bank (GIB), the country's deputy prime minister Nick Clegg revealed on Monday. And the bank will begin operating in April 2012 - one year earlier than planned, Clegg confirmed.

The deputy prime minister also confirmed that the GIB's "operational independence and enduring nature" would be enshrined in legislation, so meeting one of the critical criteria that green groups have been campaigning for with regards to the bank.

"We are determined this organisation will be part of the institutional architecture of this country," Clegg said. "Legislation will ensure a long shelf-life."

But in another key area, green lobby groups were left disappointed, as Clegg said that the GIB will not be able to borrow until April 2015, and even then, its borrowing rights will be dependent on the government meeting its target for debt to be falling as a percentage of GDP.

This reconfirmed what the industry had already been told in chancellor George Osborne's March budget (see EDEM 23 March 2011).

"Confirmation of the world's first public green bank is a mile stone, but a delay in borrowing means a delay in green growth," said Ingrid Holmes, a low carbon finance expert from climate change think tank E3G, which accused the treasury of "clipping the wings" of the GIB.

"It's a bit like buying a powerful car but being forced to drive it around with the hand brake on," Holmes continued. "If the government is really serious about delivering growth then they must take the hand brake off and let the bank borrow from the word go."

The government has guaranteed £3bn (€3.4bn) for the initial capitalisation of the bank. "As we made clear in the budget, we hope to generate these funds through asset sales, but we are also clear that the money does not depend on those sales. It has been underwritten by the treasury, and it will be made available," Clegg confirmed. JS

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