Europe approves £3bn funding for UK's Green Investment Bank

EU regulators have approved the creation of the UK’s £3 billion Green Investment Bank which will pave the way for investments in the low carbon economy and create new jobs.

The European Commission found sufficient safeguards to avoid “crowding out of private investment” and ensure fair competition whilst the bank is offering funding to accelerate the development of the UK’s green economy.

The bank’s mission is to invest in innovative and environmentally friendly projects for which a market failure has been identified. It is set to help offshore wind, waste and non-domestic energy efficiency sectors.

The Commission said the Green Bank will be capitalised with £3 billion and will intervene by syndicating and underwriting junior, mezzanine and senior debt, by taking equity stakes or granting guarantees.

According to the Commission, the new initiative will allow green projects to materialise while minimising potential distortions of competition.

The bank is seen as a crucial element in funding the country’s transition to a low carbon economy and it began investing directly in projects earlier this year.

Green Investment Bank chairman Lord Smith said: “This is excellent news and a very important milestone as we transition to a low carbon economy and work to boost investment across the industry.

“We have already made significant progress in building our teams and the necessary infrastructure for the bank and we expect to be fully operational in the next few weeks.

“We clearly have challenges ahead but we have the people, the expertise and the capability to deliver on our priorities and create the foundation for a new climate of green investment.”

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