Green Investment Bank to raise £1 billion for offshore wind farms
The Green Investment Bank plans to launch £1 billion to encourage private investors to support UK offshore wind farms.
The UK’s state-funded Green Investment Bank (GIB) has said that it plans to raise £1 billion for a fund that will encourage private investors to back offshore wind farms around the UK.
GIB says that it is looking for strategic investors to work with on a long-term basis to participate in the capital raising exercise, with the proceeds being used to purchase stakes in a number of operational offshore wind projects. The new fund will be managed by a subsidiary of GIB that will seek permission from the Financial Conduct Authority to be considered a regulated fund manager.
The government already gives GIB £3.8 billion in equity funding to support green initiatives, but the banks will now benefit from being able to raise capital from the private sector to increase the support it can provide.
Given the number of high-profile cancellations of offshore wind projects in recent months, that extra investment may be sorely needed. In March, utility company SSE said it was putting two planned offshore wind projects on ice and cutting its stake in another, as part of a plan to minimise costs – a decision that GIB will want to prevent from being taken in the future.
“GIB’s plans for a dedicated offshore wind fund are a real boost for our industrial strategy in a sector where we have a strong competitive advantage compared to other countries,” said business secretary Vince Cable.
“There are great opportunities for British companies and the industry has the potential to create 30,000 jobs for the UK.”
Although it has only been active for 18 months, GIB’s annual results showed that it is already the most active investor in the UK’s green economy, having committed £668 million to 18 different projects.
Nearly 90 per cent of that has gone into construction, but as the industry grows in maturity, it is likely that the range of investments will become much more diverse. Britain already has 3.6 gigawatts of offshore wind and is building another 1.4 gigawatts – but as the nation’s energy needs change and develop, it is likely much more will be needed from renewable sources.
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