Sir Adrian Montague
The £3bn Bank is expected to initially invest in offshore wind, waste and industrial energy efficiency but it will also look at early funding for delivering the Green Deal, Construction News reported.
Announcing that the Green Investment Bank would pump investment into renewables from April 2012, Deputy prime minister Nick Clegg said the potential of the bank to kick-start the retrofitting Green Deal would be examined.
The Green Deal, which will fit energy efficiency measures into properties and aims to employ 250,000 people, will be launched next year. But questions had been raised over the Deal’s reliance on private sector funding for the work.
Paul King, chief executive of the UK Green Building Council, said the move to use the bank to finance the Green Deal was vital.
“The Green Deal needs the Green Investment Bank,” he said. “It’s a shift by government, but it’s a very welcome one. The Bank can lend money at a lower rate than would otherwise be possible, which is essential to make the Green Deal attractive to millions of people.”
Business secretary Vince Cable said that a Green Bank Advisory Group, chaired by former British Energy chairman Sir Adrian Montague, will advise the government on the direction of the new institution.
The role puts Motague in pole position to lead the bank when it is set up, Building reported. He is currently chairman of private equity group 3i.
Cable also said the bank could lend to nuclear projects from 2015, when it begins to operate as a fully fledged bank with borrowing and lending powers.
The bank will be established under primary legislation, which will ensure it has full operational independence under the leadership of a new board. It will begin lending from April 2012 although it won’t be able to raise money itself to lend until 2015.
The government expects its £3 billion spend to deliver an additional £15bn in private sector funding by 2015.
Institution of Civil Engineers director-general Tom Foulkes told Construction News that the announcement “finally brings the idea of an independent, permanent institution to reality”.