Scotland business

Cable launches UK's 'Green Bank'

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Media captionMr Cable believes the bank will help the UK's economic recovery

The UK's new Green Investment Bank has been officially launched in Edinburgh.

The bank will have £3bn of government money to invest in areas such as renewable energy, carbon capture and storage and energy efficiency measures.

It will have its headquarters in Edinburgh, and a major presence in London.

The bank was formally opened by the UK Business Secretary Vince Cable, who also announced details of its first investments.

First to benefit from the fund will be a project in the north east of England that will generate energy from waste.

Around £8m will go to the construction of an anaerobic digestion plant at Teesside, the first of six planned over the next five years.

This will be matched with a further £8m from the private sector, according to the government.

The Green Investment Bank (GIB) will also invest £5m to fit manufacturer Kingspan's UK industrial facilities with systems that will reduce its energy consumption by 15%.

Key pledge

The bank had been a key pledge of the coalition government at Westminster.

Its official launch took place at the Heriot-Watt University Conference Centre before an audience of finance and environmental figures.

Mr Cable said the bank would place the green economy "at the heart" of the UK's economic recovery, and position the country at the forefront of the drive to develop clean energy.

He added: "£3bn of government money will leverage private sector capital to fund projects in priority sectors from offshore wind to waste and non-domestic energy efficiency, helping to deliver our commitment to create jobs and growth right across the UK.

"Having the headquarters in Edinburgh is a powerful vote of confidence in the Union, and a testimony to our commitment to helping Scotland lead the green revolution."

The Scottish government had lobbied hard to ensure Edinburgh was chosen as the location for the bank's headquarters.

Scottish energy minister Fergus Ewing said the opening of the bank presented "huge opportunities" for Scottish green energy projects, bringing jobs and investment.

He added: "Edinburgh presents the best Green Investment Bank location for the UK. Not only is the city a major financial centre, but Scotland already leads the world in renewable energy, and has built up world leading expertise from the oil and gas industry."

Dan Barlow, of environmental group WWF Scotland, described the bank launch as an exciting step towards a low carbon economy.

He said: "Significant investment in renewable energy infrastructure and energy efficiency will be critical to meeting UK and Scottish climate targets and securing the green job opportunities available."

'Potential restricted'

The Scottish Greens urged caution over the launch, saying it was hard to see how the bank would "live up to the hype".

The party's enterprise spokesman, Patrick Harvie, said: "Investing in sustainable, clean forms of energy is obvious but this bank isn't being allowed to borrow from the markets so its full potential is being restricted.

"It was also disappointing to hear Vince Cable on his visit to Scotland today refusing to rule out using the bank to support nuclear projects. And of course we know the chancellor is openly hostile to a green route out of recession."

He added: "You really have to question whether this bank will help us shift to a low carbon economy, when both the UK and Scottish governments continue to support fossil fuel extraction and aviation growth."

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