Green groups call for assurances over National Infrastructure Bank
A host of green groups have written to the Chancellor of the Exchequer Rishi Sunak, urging for the implementation of a UK National Infrastructure Bank (NIB) to de-risk private investment into low-carbon solutions.
A total of 20 organisations convened through the letter sent to Sunak, outlining recommendations for how the NIB, which was announced in the 2020 Spending Review, could steer investment towards viable low-carbon solutions.
Chancellor Rishi Sunak confirmed that the NIB would be created and begin operating in Spring 2021. It will be based in the North of England and will fill the role left by the European Investment Bank (EIB) as the UK completes the Brexit process.
Leaders from the Aldersgate Group, the Confederation of British Industry, UKSIF, the Green Finance Institute, Aviva Investors, UK100, the IIGCC, and the Trades Union Congress have called on the UK Government to learn from previous green investment mistakes.
In 2017, for example, then-Prime Minister David Cameron agreed to sale the Green Investment Bank to the Macquarie banking group, a move which was derided by green groups. However, green groups are now calling for the soon-to-be NIB to “create opportunities for citizens to participate and invest in the UK’s transition to a net-zero emissions economy”.
“The Bank should be established as a mission-driven institution with a legal mandate to achieve the levelling up agenda, the UK’s net zero emissions target and its ambition to reverse the decline of the natural environment within a generation,” the organisations wrote.
“The Bank’s primary objective should be to genuinely address market failures and act as a de-risking vehicle to ‘crowd in’ private capital towards the technologies, skills and institutions that will be needed to build a thriving net-zero emissions economy. These should include the emerging technologies needed to decarbonise complex parts of the economy, such as hydrogen and carbon capture, use and storage, but also natural capital and nature-based solutions.”
Scotland notably opened its own National Investment Bank with a net-zero remit last year, but the climate requirements of the UK bank have not yet been confirmed.
Sunak additionally launched a £4bn “levelling up” fund, designed to help cities, towns and regions improve infrastructure and skills. Local authorities and Mayors will need to bid for a share of the funding and must receive support from their MP.
In the build-up to Sunak’s announcement, the Confederation of British Industry (CBI) claimed that the UK Government needs to "undertake a significant programme of infrastructure investment" to enable regulators and private investment to create funding for critical net-zero infrastructure.
According to the Office for Budget Responsibility, the UK is set to suffer from a £372bn deficit in 2020-21, despite the Government’s financial relief policies, the equivalent of 18% of GDP. This economic downturn could hinder the required investment into national infrastructure to enable the UK to meet its net-zero target for 2050.