28 October 2015: Environmental Audit Committee meeting on the Future of the Green Investment Bank: Watch evidence session

Green Investment Bank

The Green Investment Bank was set up by the Government to support green infrastructure investment. Before the announcement of its creation in the March 2011 budget there was debate between departments on the form the Bank would take and the level of finance to be provided to it. In that budget it was announced the Bank would have an initial investment of £3bn and would not be allowed to raise its own capital until at least 2015. The Bank w able to carry out a wide range of transactions – including equity, debt and risk mitigation products – which are expected to catalyse an additional £15 billion of investment in green infrastructure by 2014/15.

Bank Setup

The Government published the five priority areas for investment for the bank during the current spending review period, together with the criteria for deciding on its location on 12 December 2011. It also announced the creation of an interim body, Green Investments UK, which would have £775 million available to invest from April 2012. The location of the Bank, Edinburgh and London, was announced in March 2012.

The European Commission approved state aid for the bank on 17 October 2012. It was then officially launched by Vince Cable at the Heriot-Watt University Conference Centre on 28 November 2012. Legislation that would enshrine the ‘green’ purpose of the bank, providing powers for it to operate including funding, and ensuring its operational independence from Government were announced in the Queens Speech. The Enterprise and Regulatory Reform Act 2013 sets out statutory basis for the “green purposes” of the Green Investment Bank and the process by which it can become fully independent of government. It also sets out what assistance government is allowed to provide, and reporting requirements.


The Bank published its annual report for the financial year to 31st March 2014 in June 2104. This showed that the GIB had recorded a loss of £5.7million, but also that it was on track to reach sustained profitability in subsequent years. The Bank reported that, in 2013/14, it had committed £668 million to 18 new green projects, taking its total capital commitments to £1.3bn of profitable investments. The Bank also announced its plan to launch a £1 billion fund to acquire equity stakes in operational offshore wind projects in the UK.

The 2015 Annual Report, published on 22 June 2015 set out that the company had made a profit for the first time of £0.1m and that they committed £723m to 22 new projects worth a total of £2.5bn.

Privatisation Announced

There has been ongoing debate about how the GIB’s ability to raise capital should be expanded. The Government announced on 25 June 2015 in a Written Statement that the Bank would be moved into private ownership with further details to follow in due course. Reactions the announcement were mixed, with many concerned that a change to private ownership would adversely impact its focus on green investment.

In October 2015 the Government set out in a Written Statement that it would have to remove all public sector controls to allow the GIB to raise capital without this affecting public sector net debt. It subsequently introduced an amendment to the Enterprise Bill in the Lords which would removing Part 1 relating to the GIB from The Enterprise and Regulatory Reform Act 2013, including its green purposes. The Environmental Audit Committee launched an inquiry into future of the GIB in October 2015 and held its first evidence session on 28 October 2015.

See Commons Briefing Paper on the Green Investment Bank for details