Green Investment Bank could move into private capital

The Green Investment bank (GIB) could potentially seek private capital in the future in order to raise additional funds, according to the bank’s CEO Shaun Kingsbury.

Currently the GIB, which is the first bank of its kind in the world, is 100% publicly owned and capitalised with £3.8 billion of public funds. So far around a third of this money has been used to back green projects and mobilise private investment.

Speaking to the Guardian, Kingsbury commented, “We will eventually need more capital. It may come in as debt or equity. There are all sorts of different flavours of capital that we could access. I would like to have somewhere between £10 billion and £15 billion.”

He continued that if restrictions around that bank’s ability to borrow from the capital markets were lifted he could raise up to £60 billion to fund low carbon energy infrastructure. This amount would represent a significant chunk of the money needed to transition the UK’s energy infrastructure to a cleaner and more environmentally friendly system.

The bank, which became a signatory of the UN-supported Principles for Responsible Investment in April, will reveal its figures for the last year on Wednesday.

Kingsbury said, “We will produce a loss this year because we are not producing income. But if we did nothing else in the way of investments we would expect to be profitable in two years’ time.

“We will need to move into profit in the next two to three years. We are well on track and if all the projects were built today we would be profitable. My job is to build a profitable and green business. We are not [environmental] activists. We are investors and we are there to make a return on this green market.”

Whilst the bank is expected to announce a loss it has achieved it its aim of mobilising private finance, for every £1 it has invested in a project an additional £3 has been raised.

Earlier this year the bank revealed plans for equity investments worth £461m in offshore wind that will use “next generation” turbines. The bank has supported a range of renewables from offshore and onshore wind to biomass.

Photo: 13dede via Freeimages

Further reading:

Green Investment Bank becomes Principles for Responsible Investment signatory

Green Investment Bank announces major investment in UK offshore wind

Green Investment Bank to support onshore wind sector

Green Investment Bank announced £11m investment in biomass plant

Green Investment Bank finalises offshore wind deal with Masdar