A report from the Environmental Audit Committee has warned the Government that the long awaited Green Investment Bank (GIB) “needs to be a bank”.
Following an enquiry on the GIB, the Environmental Audit Committee report concluded that it must be a bank, in order to: “raise its own finance, fill a gap in the market for government-backed bonds, bring in banking expertise, be permanent and independent from government, and have the flexibility to offer a range of interventions.”
The report added: “We expect the Government to allow the Green Investment Bank, as a bank, to issue bonds to institutional investors to raise much of its finance.”
Environmental Audit Committee chair Joan Walley MP, said: “Setting up a Green Investment Bank without the power to borrow would be a bit like trying to buy a house without first getting a mortgage offer. George Osborne has got the deposit, but if he doesn’t allow the bank to raise extra capital, the sums are going to fall far short of what is needed.”
The Aldersgate group – a coalition of business and politics leaders campaigning for a full GIB welcomed the report.
Chairman Peter Young said: “The committee has sent a strong signal that the Government must not dilute or under-fund its plans for the Green Investment Bank. This institution must be at the heart of the Chancellor’s pro-growth strategy, attracting investment to the UK to drive the economic recovery.”