UK Green Investment Bank (GIB)
The UK Green Investment Bank is a relatively new aspect of green business in the United Kingdom. It is a government-owned bank whose purpose is to remove financial barriers to green investments in the United Kingdom. It does this by providing low-interest loan and grant opportunities for private sector investments in sustainability. The goal of the bank is to accelerate the United Kingdom's push to meet legally mandated goals in sustainability and energy efficiency.
The Green Investment Bank has come about as a response to the looming legal commitments that the United Kingdom has made to both cut carbon emissions and push renewable energy development. By 2050, the United Kingdom is expected to significantly reduce its carbon emissions. It is also expected to get a large percentage of its energy from renewable sources within the country. Before the concept of a bank, there was genuine concern over how this type of development could be made accessible to the private sector.
The idea of a national bank did not arise until after a major meeting of the climate change committee in the House of Commons. During the meeting, it was established that the only way to realistically make sustainable development available to the private sector was to enact certain financial supports. However, the bank itself was never mentioned until its inclusion in the 2010 national government budget. This led to the formation of a green investment bank coalition in the government.
By October of 2010, the bank had reached a state of permanence in the government of the United Kingdom. There were fears that the bank could swell the budget deficit in the government. To counteract this, the bank was announced amid a slew of other austerity measures in the government that sought to lessen the liability presented by the bank. It is expected that the first green investments to be funded by the bank will begin in April of 2012.
Unlike the Green Deal provisions of the Energy Act of 2011, investment by the Green Investment Bank will necessitate an adherence to a strict set of criteria. These criteria have been set forth by independent and government investment analysts.
All projects or businesses seeking investment from the Green Investment Bank must show how they will contribute to the goal of pushing the United Kingdom toward a green economy. This can include improving resource efficiency, reducing greenhouse emissions, promoting biodiversity, improving natural ecosystems, and developing more efficient ways to use land. This is not an all-inclusive list of criteria.
Projects and businesses must also show that they have a sound financial infrastructure in place before being considered for investment. This is a requirement for a couple of different reasons. First, it means that all potential investment-seekers should have a solid financial portfolio that shows a definite potential for positive portfolio returns. Second, the Green Investment Bank needs to make sure that it is investing its limited funds in projects and businesses that will have a continual impact on the green economy of the United Kingdom. It would be a waste of money to invest in building a green economy with businesses that are not around long enough to create a positive impact with that investment.
The Green Investment Bank needs to be sure that the investment it makes in one business or project can have a positive impact on the green practises of another business or project. The goal here is to create a multiplying effect on the investment that makes each investment much more worthwhile.
Questions and comments are encouraged by the government and a special email contact has been created to assist in the flow of information. If you want to contact the banking team with any questions or comments, you are encouraged to contact the BIS Green Investment Bank team at firstname.lastname@example.org. You can also contact the London office of the Department for Business Innovation and Skills by post at the following address:
You can also find the email contacts for the various Ministers of the department through the contact page of the website of the Department for Business Innovation and Skills.