UK VCs call for creation of Green Investment Bank

24 Mar 2010 | News
Venture capitalists have called for the creation of a Green Investment Bank to accelerate private sector investment.


Venture capitalists have called for the creation of a Green Investment Bank (GIB) to accelerate private sector investment in support of the UK’s 2020 and 2050 low carbon, renewable energy and energy security targets.

A paper written by the British Venture Capital Association, published this week says that creating a low carbon economy will entail vast investment. For a start, a minimum £200 billion needs to be invested in power generation and grid investment to 2020; more money will be required to back technologies and companies in energy efficiency, smart grid and new forms of transport and power generation.

The paper proposes the primary objectives and operating principles of a GIB, and argues that action is needed quickly.

Key recommendations of the report:

A GIB should help attract the private sector capital necessary to deliver the UK’s 2020 and 2050 low carbon and renewable energy targets;

  • It should facilitate and not compete with the private sector;

  • It should invest on a fully commercial basis;

  • It should offer a range of standardised investment products for low carbon projects and companies promoted and vetted by private investors, always investing alongside private capital and targeted to address market failures;

  • It should be primarily self-funding and able to draw on the capital markets, including through the issuance of Green Bonds;

  • It should provide independent advice to the government on delivering the low carbon economy;

Simon Walker, Chief Executive of the BVCA, said it is clear that to reach climate change targets, market and government forces must come together. However, the low carbon and renewable energy sector and much of the financial sector has been beleaguered with regulatory uncertainty.

“What is certain is that private capital should be favoured over public capital to [...] meet our climate change commitments. As the private sector has a role to play, so does the government in ensuring a stable investment environment. Configured correctly, the Green Investment Bank can achieve this.”

The report was written by the BVCA’s Energy, Environment and Technology Board, a consortium of leaders from venture capital and private equity firms who invest across the spectrum of clean technologies, infrastructure and renewable energy projects. Collectively they have over £10 billion in funds under management.

Never miss an update from Science|Business:   Newsletter sign-up