Unlocking investment to deliver Britain's low carbon future

How the Green Investment Bank can address investment barriers and market failures

The BVCA Energy, Environment and Technology Board (EETB) - a group of leading UK-based investment practitioners in the low-carbon sector - applauds the efforts of the Green Investment Bank Commission, chaired by Bob Wigley, as they publish a report entitled "Unlocking investment to deliver Britain's low carbon future". The report, published today, identifies how the Green Investment Bank can address the investment barriers and market failures that are constricting investment into low-carbon technology and infrastructure.

Supporting investment from equity to debt

The BVCA especially welcomes the parts of the report focusing on the Green Investment Bank supporting investment across the spectrum from equity to debt, and supporting early to late stage technologies through focused intervention to attract private capital, much of which can come from BVCA members.

Catalysation of private investment

The BVCA also supports consolidating the funding of green energy initiatives that will deliver the scale needed to catalyse private investment into this sector and make existing government support for low-carbon innovation more cost-effective. This reflects a more coherent approach for the government to achieve its climate change objectives and also ensures that the Green Investment Bank will not crowd out the private sector.

Stable investment environment

Commenting on the report, Simon Walker, Chief Executive of the BVCA, said: "The Commission's report recommends the creation of the Green Investment Bank and reinforces the core principles the BVCA outlined in its Green Investment Bank paper published in March. This marks the next step in implementing a well-designed Green Investment Bank that will facilitate and accelerate private sector investment and build public support for reaching Britain's low carbon, renewable energy and energy security targets.

The BVCA has long argued that the private sector has a critical role to play to rebuild the country's economy, create jobs and meet our climate change commitments. It is clear as ever that to reach Britain's targets, market and government forces must come together. Everyone recognises that instability harms investor confidence and drives private capital to other markets. For this reason it is absolutely imperative for the government to ensure a stable investment environment. Urgent action is required and the BVCA looks forward to further engagement to ensure a successful Green Investment Bank is created."

Central repository for government green funding programmes

Tom Murley, Chairman of the BVCA's EETB, said: "The process of creating the Green Investment Bank should begin immediately in order to reach Britain's climate commitments by 2020 and thereafter and to prevent short term market uncertainty. The report by the Green Investment Bank Commission correctly highlights the sense of urgency that surrounds the creation of the Green Investment Bank and proposes an appropriate scope. As investment practitioners, our view is that the Green Investment Bank should act as a central repository for government green funding programmes, replacing the existing fragmented approach."

Return for taxpayers

"It should be a focal point of expertise and data to advise the government" continues Tom Murley, "while maintaining its independence so that it can be managed on a commercial basis and provide a return for taxpayers. Given the global and national need to meet long-term targets for reduced carbon emissions, the opportunity to address short-term market failures and unlock the potential of Britain's low carbon economy is one that cannot be missed."

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