The UK government is planning to recreate a taxpayer-backed Green Investment Bank to help fund technologies and infrastructure needed to reach its legally binding 2050 net zero emissions target, according to the energy minister.
Kwasi Kwarteng has told climate change campaigners of a “broad discussion” in government to create a “Green Investment Bank 2.0”, only three years after the original GIB was privatised through a £2.3bn sale to Australian financial group Macquarie.
The decision to sell the original GIB was fiercely opposed at the time by MPs and green campaigners, with parliament’s public accounts committee calling it “deeply regrettable” in a report in 2018.
Environment groups have recently upped their campaign for a second state-backed green infrastructure bank to ensure the government-led recovery from the Covid-19 lockdown keeps the UK on track with its climate goals.
Mr Kwarteng told an online meeting of climate campaigners on Monday that there would likely be an announcement about a new GIB “in the not too distant future”.
He said there has been “a broad discussion within government about . . . how we can in effect create the Green Investment Bank 2.0, I think that’s an ongoing debate within the government and I fully expect there may well be announcements in that regard in the not too distant future”.
Mr Kwarteng said: “I can’t tell you exactly what the nature of that bank will be, but clearly the fact we are now committed to net zero over the next 30 years and clearly the fact we need a huge amount of investment in order to have any chance of getting there, suggests that there may well be scope for the kind of development bank that you described”.
Mr Kwarteng was referring to suggestions by the group UK100, a network of local government leaders with an interest in climate and clean energy policy, that Britain needs a new “net zero development bank”.
Other environment experts and groups such as E3G and Nicholas Stern, chair of the Grantham Research Institute at the London School of Economics, have also been pushing for a new national investment bank focused on green targets.
Polly Billington, director of UK100, said: “We can fund the route to net zero with business and banks taking on a much bigger role in building back better. Green investment will create thousands of jobs, tackle climate change and secure the recovery.”
UK100’s research found that £5bn of public funds invested in renewable energy could unlock £100bn of private capital, Ms Billington said.
The original GIB was launched in 2012 by Vince Cable, then business secretary in the coalition government, with £3bn of government money to encourage private sector investment in clean technologies such as offshore wind.
The Department for Business, Energy and Industrial Strategy did not immediately respond to a request for comment.