Alex Morales and Rohan Boyle, Bloomberg
January 16, 2013 | 0 Comments
The U.K. Green Investment Bank may allocate all of the 3 billion pounds ($4.8 billion) provided by the government to stimulate investment in clean technology by as early as 2015, Chief Executive Officer Shaun Kingsbury said.
“We feel confident that in the next two to three years we can commit that capital,” Kingsbury said of the 3 billion pounds. “There is an opportunity for that.”
The bank is part of the U.K.’s efforts to stimulate the renewable energy projects and carbon reductions required to meet its binding targets of deriving 15 percent of all energy from renewables by 2020 and cutting emissions by 34 percent in 2020 from 1990 levels.
Kingsbury said there’s potential to get added support for renewables through a new law allowing the government to guarantee as much as 40 billion pounds of infrastructure investment.
“Certainly a portion of that money could go into the renewable energy business,” he said. “We will want to work closely with them” to use Treasury guarantee programs alongside Green Investment Bank money on joint deals, he said.
Two days ago, the bank said it was lending 30.4 million pounds to help Shanks Group Plc build a waste recycling and power plant. Last month, it provided a loan facility of as much as 100 million pounds for Drax Group Plc to convert burners at its power station to biomass from coal. It also provided 45 million pounds to allow PGGM NV and Ampere Equity Fund to refinance their 24.8 percent stake in an offshore wind farm.
Kingsbury said he has two bottom lines for transactions: to make an “adequate” return on investments, and to ensure the bank’s loans, bonds and stakes add “sustainable benefits” to the U.K. economy.
“Our job is to crowd in other capital, by being part of a syndicate to ensure that something gets built that wasn’t going to get built,” he said. “We won’t provide soft loans, be the lender of last resort, or provide grants or anything like that.”
Because of its rules on profitability, Kingsbury said it could take more than five years for marine technologies such as wave and tidal power to meet that criterion, so for now, they’re not priorities. For offshore wind, he said the bank is focusing on putting money into existing assets to free up cash for developers to invest in new ones.
Kingsbury spoke in a Jan. 10 interview. The bank was established in May and became operational in October after receiving state aid approval from the European Union, allowing it to disburse funds.
Lead image: Bank sign via Shutterstock
To add your comments you must sign-in or create a free account.