The Green Investment Bank - Environmental Audit Committee Contents

3  The Green Investment Bank's governance and remit

40.  The extent to which a Green Investment Bank is a 'bank' or a 'fund' will have a fundamental impact on the governance arrangements and remit of the Bank, including the types of financial support the Bank could offer and in what areas.


41.  How independent the Green Investment Bank is from government is an important consideration not just for the Government's ability to influence what the bank does, but also the Bank's ability to raise finance from private sector investors. A fully independent Bank, beyond day-to-day political control, will help gain the confidence of investors, but this may reduce government's ability to influence and direct the Bank's priorities. Strong governance arrangements are therefore needed to tackle this tension. The Green Investment Bank Commission suggested establishing:

  • An advisory council made up of shareholder representatives, Ministers and individuals representing the public interest or with an environmental or social focus. The council would advise on the areas they would like the Bank to focus its efforts upon.
  • Below this advisory council would sit a board of directors with legal responsibility for the commercial operation of the Bank. The board would be primarily made up of professional financiers, independent commercial business leaders and sector investors. The board would be responsible for approving strategy and could have final say on whether investment proposals were approved.
  • A management team, led by a chief executive, would be responsible for day-to-day operations within the strategic framework approved by the board.[65]

We agree with the Green Investment Bank Commission that governance arrangements distinguishing between an advisory council and a board of directors would be helpful.

42.  KfW, the German development bank, was set up as an independent and permanent institution by legislation. This provides the legal basis for KfW's German government guarantee. When the Queen's Speech was presented, the Government indicated that the Energy Bill could contain measures to create a Green Investment Bank.[66] The Bill was introduced in the Lords in December 2010, but there is no mention of the Green Investment Bank in the Bill. We questioned BIS on this last month, and they told us that:

There are other legislative opportunities and we have a list of those. The likeliest form is probably a public corporation. But the question of how much that would need to be done in statute, and how much could be done by secondary legislation, is not yet determined, so that is one of the areas that is actively under review as we do the planning work [for the Bank].[67]

43.  If the Government concludes that it does not need to introduce an amendment to the Energy Bill, it should without delay be transparent about what legislative route it intends to take to set up the Green Investment Bank. That would ensure that this can be built into the parliamentary timetable so as to allow for sufficient scrutiny.

Banking reform

44.  The Government expects the Green Investment Bank to have an explicit mandate to tackle risk that the market currently cannot adequately finance. This will help 'catalyse further private sector investment and facilitate the entrance of new types of investor into green infrastructure'.[68] Indeed, the Business Secretary told us that there are "high-risk projects that have an important environmental aim—wind projects would be a good example—that are not going to happen on the scale that they should without the investment of an institution of this kind".[69]

45.  The Coalition Agreement sets out the Government's plan for reform of the banking system. This included putting in place a framework to promote responsible and sustainable banking, where regulators have greater powers to curb unsustainable lending practices, and to take action to promote more competition in the banking sector.[70] In June 2010, the Business Secretary and the Chancellor announced the creation of an Independent Commission on Banking, chaired by Sir John Vickers, to tackle systemic risk in the banking system. The Commission was asked to consider reforms to promote financial stability and competition, and to make recommendations to the Government by September 2011. In a speech at the London Business School on the 22 January, Sir John is reported to have said that plans to separate banks' trading and retail operations were being examined. These might require banks to put their investment arms into separate entities that could now be allowed to collapse without precipitating a run on the retail banking sector.[71] We questioned the Business Secretary as to whether the Green Investment Bank—as an investment bank—would be allowed to fail, and he told us that:

If it was a Government institution, then, by definition, it would not [fail]. If it was a purely private bank at some stage in the future, or if it were to spin off as a private bank, then certainly that would be the definition of a private bank, would it not? I think the exercise that Sir John Vickers and the Commission are concerned with is a rather different one. It is concerned with these very, very large global banks—of which we have three major ones in the UK […] which are so enormous in their scope that they can destabilise the whole economy. The Commission is looking at how to make them safe. This is a very different kind of exercise from the risks that would be associated with an institution of the kind we are talking about.[72]

46.  In setting up the Green Investment Bank, the Government faces a dilemma. It sees a Bank investing in riskier areas where private sector finance is currently reluctant to venture, but its banking reform agenda aims to reduce the likelihood of banks over-extending themselves. A Green Investment Bank backed by government guarantee would prevent it from failing, which would help it to raise funds and lend them on at a lower rate —an important consideration for some potential areas of investment, as below.

47.  The Government will need skills from both the banking and environmental sectors. Having the right mix of expertise within the Green Investment Bank, once it is operational, will have an important impact on investors. Philip Wolfe from the Aldersgate Group told us that many large scale investors do not have specific expertise on environmental markets.[73] James Cameron from Climate Change Capital explained that the culture of the organisation should be expert and it should be able to attract very high quality people so that it will have status and clout in commercial markets, otherwise the other institutions that it would need to work with will not give it sufficient respect.[74]

48.  In the short term, as it is establishing itself, the Green Investment Bank will need to attract banking and environmental talent from existing companies. Ben Warren from Ernst and Young told us that the Bank's ability to attract talent will largely be influenced by the remuneration packages it offers, including bonuses. On the other hand, the ability to outsource work and expertise should be considered to avoid building an unduly large overhead for the institution.[75] The Westminster Sustainable Business Forum argued that the Bank must find a balance between offering appropriate remuneration structures to attract talent with its responsibility as a publicly funded body.[76] RegenSW believed that it was essential that there was representation from the third sector on the Green Investment Bank's board and executive team to ensure that investment priorities are balanced, not only between economic and environmental issues but also with social issues.[77]

49.  Once operational, the right skills mix within the Green Investment Bank will be vital for attracting investors, and that will require competitive remuneration. Representation from the third sector on the Green Investment Bank's board could help ensure a balance between economic, environmental and social issues in the Bank's investment priorities. (We make further recommendations about the Bank's board below).


50.  We welcome the Government's intention to publish data on the funds in the Green Investment Bank, and on investments made by it, by May 2013.[78] KfW, whose remit includes functions similar to those likely to be given to the Green Investment Bank, measures its performance by the impact achieved by the different programmes it manages—jobs created, emissions avoided, the volume of investments generated, etc.[79] Transform and E3G recommended that the Green Investment Bank should be tasked with producing a comprehensive annual public report on its activities.[80]

51.  Private sector companies do not currently have explicit obligations to report on sustainability. Many voluntarily include 'corporate social responsibility' commentaries in their Annual Accounts, and some larger and 'greener' companies produce separate 'sustainability reports'. In the public sector, the Treasury is overseeing an initiative whereby central government departments and bodies will produce 'sustainability reports' alongside their Accounts, providing as a minimum information on greenhouse gas emissions, waste minimisation and management, use of finite resources, biodiversity, and sustainable procurement. It is planned that departments will produce sustainability reports from 2011-12 onwards, preceded by dry-run reports in 2010-11.[81]

52.  Monitoring of the Bank in its early years will be important to gauge its impact and assess whether it has been designed and set up in the right way. The Government needs to set out clear performance reporting arrangements that should include data on a range of key indicators about its performance in advancing green objectives. As a centre of expertise for 'green' investment, it naturally follows that the Bank should observe best-practice on 'sustainability reporting'.

Type of financial support—equity, loans and risk-reduction

53.  There are a number of types of intervention that a Green Investment Bank could make. It could provide direct investments in projects, alongside other investors or on its own. These investments could be in the form of equity—investments in return for a share of the company or future profits—or loans. The Bank could also offer different types of 'de-risking products' that help tackle particular areas of investment risk to help get private investor finance following, such as insurance.

54.  The Green Investment Bank Commission has provided a thorough review of these many interventions, and we have therefore not explored this complex area in any great detail. However, our evidence has provided some important considerations for Government when designing the Green Investment Bank, which we set out below.

55.  There was support for the Green Investment Bank providing equity investments, rather than only providing loans. RenewableUK argued that if the Bank were to take equity stakes in offshore wind projects, this could unlock further financing by allowing developers to raise more money through loans elsewhere. As an equity investor, the Bank could sell its shareholding in due course and recycle this capital into other projects. RenewableUK argued that the Bank could offer loans, but probably not enough to make a difference in that sector. They pointed out that equity investment would also have an important symbolic affect, providing:

[...] a significant confidence boost […] as other investors could see that the Government had a direct stake in the success of projects part-owned by the Bank, and thus could be better relied upon to ensure the policy environment was stable.[82]

EDF energy similarly argued that the primary focus of the Bank should be to provide equity funding, and that it should not look to provide loans to projects at the development stage, because the utility sector is constrained in its ability to deliver the required investment by over-stretched balance sheets. It told us that loans:

[...] could be considered to be a subsidy, given that commercial lenders are generally not prepared to finance riskier large scale projects during their early stages. The [Green Investment Bank] would therefore not be able to demonstrate that it was behaving commercially, and may therefore be considered to be providing State Aid.[83]

56.  The Energy Technologies Institute and Green Alliance, however, supported the case for the Green Investment Bank offering loans.[84]

57.  One way of bringing new capital into the renewables market is to reduce risks for other investors.[85] The Bank could support businesses and lenders by providing 'de-risking' funds that can act as a guarantee to lower the risk to other lenders, thus enabling more lending to flow.[86] Many of those who submitted evidence for our inquiry favoured the Green Investment Bank offering extreme weather insurance to support offshore wind development. The Government appears to favour this de-risking approach. The Business Secretary told a conference organised by the Aldersgate Group:

It will have a mandate to tackle risk inherent in financing green infrastructure that the market currently cannot adequately accommodate. For example, in offshore wind the construction risk can be a prohibitive issue for investors, and government is looking at types of de-risking products for construction and operating phases, to help the private sector introduce cheaper forms of low risk capital.[87]

58.  The Government has stated that it will decide on the role and operating model of the Bank after market-testing its design. The Business Secretary told us that an announcement on the Bank's 'concrete business operating model' will be made in May.[88] Witnesses had mixed opinions as to how rigidly the Bank's role should be defined. Prashant Vaze from Consumer Focus warned against setting a rigid role for the Bank in advance, to allow it to develop over time:

When [KfW] was first set up, it was created in order to rebuild Germany after the Second World War. The [European Bank for Reconstruction and Development] was created for issues to do with stimulating market economies in the eastern bloc countries. We must not be too specific about what its purpose and function is because these things develop over time.[89]

However, Elliot Mannis from the Woodland Trust advocated setting out clearly the Bank's role:

I think in the mandate to the Green Investment Bank, there must be a very clear statement around the purpose and intent and how funds ought to be deployed because it is our money. It is the antithesis of a bank in the traditional sense, capitalised from private funds.[90]

59.  Not all infrastructure investment is green, and there is a risk that the Bank could face demands from many quarters for funding. The World Development Movement suggested that 'green standards' need to be at the core of all investments promoted by the Green Investment Bank, and that these should be defined so that they drive investment to the leading edge of low carbon energy.[91] Penny Shepherd from the UK Sustainable Investment and Finance Association wanted to see the Bank having a robust process for evaluating broader social and environmental risks and benefits of potential investments, rather than an "exclusion list".[92] Green Alliance suggested reinforcing green investment by linking the Bank's remit to the Climate Change Act.[93]

60.  When deciding on the role of the Green Investment Bank, there may be advantages for it being able to start small and not being expected to tackle every barrier to investment straight away. This could help build investor confidence. Penny Shepherd from the UK Sustainable Investment and Finance Association told us that it is very important from an investor's perspective that the Bank would have the freedom to select simple things to do first and that it would not be asked to address every possible opportunity. It would need to build up the trust of investors by being successful in its early years.[94] Kirsty Hamilton from Chatham House suggested that for simplicity and confidence-building the Bank could aim to facilitate projects getting to completion that otherwise would not.[95]

Areas the Green Investment Bank could invest in

61.  There are a range of different areas a Green Investment Bank could be active in. The Green Investment Bank Commission suggested that:

[...] in its initial phase, the Green Investment Bank focuses on supporting the areas where maximum impact and speed to implementation can be achieved. For example, the scale up of investment in proven energy efficiency projects that can lower the overall development need of renewable energy sources. Investment in enabling technology, such as smart grids, that reduce the cost for other low carbon investments, and support of both proven and high impact third-round offshore wind, should all be priorities.[96]

Nevertheless, we heard evidence also in favour of a wider range of potential areas for investment, as follows.


62.  The World Development Movement supported a Green Investment Bank that only financed projects or technologies that reduced the carbon intensity of energy production, or else it warned that the UK may not meet its emission targets.[97] EDF energy supported a Bank that initially focused on investing in energy generation projects and technologies that have the potential to deliver a positive environmental impact by 2025, to allow it to generate a return on a portion of its investments within a reasonable timeframe, and thereby build confidence in the Bank as an ongoing financial player.[98] Scottish and Southern Energy argued that the Bank could have the most impact in pre-construction stages of capital intensive, low carbon electricity generation projects such as carbon capture and storage, nuclear and renewables.[99]


63.  The current economic environment is very challenging for businesses, particularly start-ups and SMEs wanting to raise finance for developing innovative green technologies.[100] Unite the Union argued that it was vital that an investment strategy for SMEs is included in the objectives of the Green Investment Bank, because innovation comes predominantly through SMEs and SMEs make up 80% of the UK manufacturing base. Without investment in SMEs, Unite was concerned that the supply chain would not be in place to support big energy projects. James Wilde from the Carbon Trust also believed there was a massive opportunity to unlock energy efficiency in Small and Medium sized Enterprises.[101]


64.  The Creativity Partnership found that a lack of finance for innovation often meant that innovations have to go overseas to be exploited, and hence 'UK plc' only gets a small proportion of the value that our innovators create. What finance is available for small business is poorly suited to entrepreneurial activity; a bank loan secured on assets is of little use to an innovative small business that really needs capital that can be subject to risk. If 5% of the Green Investment Bank's lending were allocated for 'green innovation' by SMEs, the Creativity Partnership believed it would be 'transformational'.[102]


65.  New technologies carry an extra risk in that it is often unclear how the business model for their exploitation will work. New technologies will often require significant investment to demonstrate the commercial opportunities they present. Ingrid Holmes from E3G told us that through its investments the Green Investment Bank could deliver a 'proof of concept'—that significant investment would be viable—before stepping back and allowing private sector investors to step in.[103]


66.  TransformUK and E3G told us that a substantive pipeline of viable community renewable energy projects exists, but financial and legal expertise combined with lack of equity funding is preventing these deals from going ahead.[104] The Co-operative Group suggested that supporting community action schemes would be a perfect role for the Green Investment Bank because it would be addressing a market failure that other bodies are not tackling: a lack of funding for planning such schemes.[105]

67.  The Environmental Industries Commission told us that measures to protect the environment can yield significant economic benefits as well as ecological gains. The UK is at risk of getting left behind its international competitors, as they continue to put in place ambitious support measures for their environmental industries.[106] Other development banks provide support for environment protection.[107] The Woodland Trust told us that woodland creation could be supported by the Bank, to deliver a range of benefits including absorbing atmospheric carbon and improved flood management and water quality.[108]


68.  It is clear that the Green Investment Bank will need a way of prioritising its investment decisions. Achieving the right balance of areas to focus on, at least initially, will be an important task for the Government and the Green Investment Bank. The Co-operative Group argued that the Green Investment Bank should not be pulled into a narrow focus; enabling a range of renewable schemes could have positive knock-on effects such as educating and enabling people to make further improvements as to how they use and save energy.[109] Scottish and Southern Energy, on the other hand, argued that the Bank should become a specialist in its chosen areas, so that it could understand and price risks: It should not try to fund every facet of green energy, 'otherwise it runs the risk of spreading itself too thinly and diluting its potential impact'.[110]

69.  Investments made by the Green Investment Bank, depending on their size, could mean that the Bank is effectively 'picking winners'. Witnesses warned of the potential pitfalls of doing that.[111] Philip Wolfe from the Aldersgate Group told us that in any case there will be important enabling investments in smart grids and heat networks, which will be necessary early on to enable other technologies to come through.[112] The Energy Technologies Institute has developed an 'energy systems model' that it told us could be a tool for the Green Investment Bank to choose projects that are both economic and practical.[113] Perhaps, most helpful, the Government is piloting a departmental carbon budget system which could offer the Bank an existing assessment of what needs to be done in particular sectors, and any pressing needs in particular, which could help prioritise the sequence of its investments.[114]


70.  When it comes to new nuclear power, there are particular issues that impinge on whether the Green Investment Bank should support it: whether that would constitute a subsidy; whether new nuclear is the sort of technology that might not otherwise be funded because of 'market failure'; and whether in any case the scale of investment involved would be a disproportionate use of the resources of a Green Investment Bank.

71.  The Coalition Agreement sets out the political agreement reached between the Conservative party and the Liberal Democrats on nuclear power. It envisages the replacement of existing nuclear power stations provided that they receive 'no public subsidy'.[115] On 18 October 2010, the Secretary of State for Energy and Climate Change made a Written Statement on energy National Policy Statements, which laid out further details on what 'no public subsidy' means:

[...] there will be no levy, direct payment or market support for electricity supplied or capacity provided by a private sector new nuclear operator, unless similar support is also made available more widely to other types of generation. New nuclear power will, for example, benefit from any general measures that are in place or may be introduced as part of wider reform of the electricity market to encourage investment in low-carbon generation [...] Our 'no subsidy' policy will [...] need to be applied having regard to proportionality and materiality.[116]

72.  A Green Investment Bank, backed by the Government, might be able to provide finance at lower rates than would otherwise be available from commercial banks. Scottish Power and EDF energy argued that if the Green Investment Bank operated in a commercial way, investing in nuclear alongside utility companies on equal terms, that should not be considered a subsidy.[117] We questioned the Economic Secretary to the Treasury on whether a lower than 'market' interest rate from the Green Investment Bank would constitute a subsidy, to which she responded:

[...] it is very clear-cut in the guidelines that DECC has issued that there won't be a levy, there won't be direct payment or market support for electricity that's supplied or capacity provided by private sector new nuclear operators [...] I don't think it's fair for me to jump the gun and say what the Green Investment Bank will or won't be investing in. What I can assure you is that we're going to stick to the guidelines that DECC has issued.[118]

The Business Secretary offered a similar view.[119]

73.  Rupert Steele from Scottish Power questioned the role that the Bank could play with the limited resources so far committed for it.[120] Paul Spence from EDF energy, which may build four new nuclear power stations, told us that those investments would be very large and "we need to find some creative ways to obtain that financing and I wouldn't rule out the Green Investment Bank having a role to play in that [...] the Bank can send a signal to other sources of funding, other investors, that this is good project to invest in. Their impact isn't what they put in, it is the multiplication of that by providing confidence for other investors, and that then doesn't use up the funding".[121]

74.  In our judgement there remains some ambiguity about whether, under the terms of the Government's statement, Green Investment Bank support for new nuclear would constitute a subsidy—whether, for example, support would be regarded as market support similar to that made also available to other types of generation. The Government needs to provide greater clarity on what would constitute a subsidy in regards to Green Investment Bank support for new nuclear.

75.  There was a range of views about whether a Green Investment Bank investing in nuclear would deter some potential investors. Paul Spence from EDF energy told us that its polling showed growing support for nuclear to play a substantial role in a balanced energy mix and that he would not expect nuclear power to have a material effect in deterring investors.[122] Penny Shepherd from the UK Sustainable Investment and Finance Association suggested that when institutional investors look at the overall risk-adjusted return that they can get from the Green Investment Bank, they will take a view on the risks associated with nuclear as part of that mix. However, when looking at individual investors, there could be a more mixed impact, as she explained:

[...] there are some private investors who will be more than happy to invest in nuclear; whereas for others, if the Green Investment Bank is investing in nuclear, that will put it outside the sphere of opportunities they are interested in. It seems to me that in that environment the Green Investment Bank might wish to look seriously at being able to offer hypothecated investments that are, for want of a better phrase, nuclear-free.[123]

76.  Some potential private investors may be put off investing through the Green Investment Bank if it were possible that it could invest in nuclear power. It would, however, not be appropriate for the Green Investment Bank to invest in nuclear, where the technology is already established. There is a range of other potential interventions for the Green Investment Bank, as we discuss below, where its support will be vital and will make a real difference.

Green ISAs

77.  The bulk of the Green Investment Bank's source of finance is likely to be through the issue of green bonds (Part 2). However, 'green ISAs' could provide additional sources of finance, while also providing a symbolic way for individuals to contribute to a low carbon economy. They could get people saving and start linking savings with tangible things that help people, society and the planet.

78.  The Coalition Agreement commits the Government, when creating a Green Investment Bank, to create green financial products to provide individuals with opportunities to invest in the infrastructure needed to support the new green economy.[124] Over 18 million people—around one in three adults—have an ISA, with more than £220 billion invested.[125] The Green Investment Bank Commission suggested that green ISAs may be only a small part of the solution to the funding gap, but would provide a visible and symbolic way for individuals to make a contribution to the Green Investment Bank. It estimated that over time it may be possible for the Bank to capture 10% (£2 billion) of the annual amount of cash ISAs raised.[126] Incentives could be provided through greater future increases to personal ISA allowances for green ISAs.

79.  Green ISAs might provide a way of people building trust in savings and investments after the financial crisis.[127] James Cameron from Climate Change Capital told us that because of the ISAs' link to infrastructure, people can understand that their savings have built something in their community that they use, restoring faith in what investment is really for.[128] Jonny Mulligan from the Environmental Industries Commission suggested that the Green Investment Bank should be clear when asking people for their savings about where it will invest these.[129] Elliott Mannis from the Woodland Trust suggested differently packaged products, each developed with specific purposes in mind, for example a 'woodland bond'.[130]

80.  The Treasury told us that its current work is looking at what a Green Investment Bank could do to promote the green ISAs already offered by a number of banks and companies, as well as the potential for those banks or companies to invest with the Green Investment Bank.[131] The Energy Technologies Institute argued that delaying the introduction of ISAs until the Bank is established and proven would be prudent.[132] The Business Secretary told us that the Government was also thinking along such lines:

I think that is a longer term proposition. Certainly we are not envisaging retail finance as a first stage but [...] I have suggested an evolutionary approach. Of course retail finance and green ISAs are quite an attractive concept, and in the longer term I can envisage this being part of the mix.[133]

81.  We are disappointed that the Government sees 'green ISAs' and other retail investments as a longer term option—they could provide an important symbolic way of enabling individuals to contribute to the low carbon transition. The Government should give the Green Investment Bank the power to offer green ISAs once it becomes established, and should consider how it might get green ISAs off to a good start, for example by making the ISA investment limit higher for Green Investment Bank-issued ISAs. The Bank could tailor green ISAs and similar products to the types of investments that different groups of potential customers wish to invest in, for example 'woodland bonds'.

Support for the Green Deal

82.  The greater uptake of energy efficiency measures in homes and businesses is vital for cutting energy demand. Producing over a quarter of the UK's carbon emissions, the housing stock is an important source of rising energy demand.[134] The Green Investment Bank Commission reported that:

One of the essential elements in delivering a low carbon Britain is to introduce energy efficiency improvements such as high efficiency windows, lighting, temperature control and more efficient boilers in millions of homes and commercial buildings in the public and private sectors.[135]

83.  The level of investment required for energy efficiency measures is enormous. Ernst and Young stated that the cost of retrofitting the UK's 26 million homes to a high energy efficiency standard would be up to £230 billion, between now and 2025.[136] The scale of finance needed is only one barrier. Energy efficiency measures are often not attractive to investors because they comprise many individual, low value investments, as the Green Investment Bank Commission pointed out:

The challenges of aggregation, making funds available and then repaying them, deal execution and transaction cost management are surmountable, but the current institutional frameworks and capital markets are unlikely to execute what is required. 'Retrofitting' older homes with new energy saving appliances is a perfect example because of the huge number of small buildings involved [...] The sheer scale of the projects will require a nationally coordinated response.[137]

84.  There are factors that affect demand for energy efficiency measures. The Energy Saving Trust, surveying households, classified barriers into three categories:

  • Awareness—residents unaware of the measures, or do not know how to take them up. 15% say they have never thought of installing cavity wall or loft insulation.
  • Motivational—they have not taken the measures because they consider it a hassle, or they are 'putting it off'.
  • Affordability—installing loft or cavity wall insulation is considered to be too expensive or the payback period too long.[138]

85.  Our witnesses supported the idea of the Green Investment Bank having a role in energy efficiency improvements. This role included:

  • Aggregating domestic energy efficiency improvements into much larger packages, opening up investment from private sector investors.[139]
  • Providing low-cost finance directly to households.[140]
  • Providing finance to develop energy efficiency industries: Consumer Focus pointed out that a low cost financing mechanism is needed to develop immature industries related to energy efficiency, such as solid wall insulation, making these measures more affordable.[141] This is a pressing issue as the Committee on Climate Change estimates that 2.3 million homes will need to have solid wall insulation fitted by 2022 to meet climate change targets—equivalent to nearly 210,000 each year from 2011[142] (there are currently only 16,000 to 23,000 solid wall insulation refurbishments undertaken each year).[143]
  • Providing finance to businesses for energy efficiency which, the Energy Services and Technology Association pointed out, would offer greater energy savings per building than the domestic sector.[144]

86.  The role that a Green Investment Bank could assume here depends in part on the design of the Government's Green Deal initiative, which aims radically to increase the take-up of home energy efficiency improvements. The proposals would establish a framework to enable private firms to offer consumers energy efficiency improvements to their homes, community spaces and businesses at no up-front cost, and to recoup payments through instalments in their energy bills.[145] The Energy Bill, currently in the Lords, includes provisions for the Green Deal, with the first projects starting in autumn 2012.

87.  The Government is in discussions with the investment community about the best way of ensuring Green Deal providers can access affordable capital.[146] The Association for the Conservation of Energy told us that energy suppliers' balance sheets will not be able to absorb the full costs of the Green Deal given the potential scale of demand. Banks had indicated that they would be unwilling to provide the finance, initially at least, because Green Deal finance would be tied to a meter-point (not a person) and involve relatively small levels over a long payback period (up to 25 years). In addition, a low interest rate is required to achieve the Green Deal 'golden rule'—the charge for installation of the measures should be exceeded by the value of the fuel bill savings over the lifetime of the charge.[147] The Association for the Conservation of Energy told us that:

[...] at commercial interest rates it is unlikely that higher-cost measures, beyond cavity wall and loft insulation, will be able to meet the 'golden rule'. If the Green Deal is to deliver 'whole house' packages of the kind that we need to meet our carbon reduction targets, then the [Green Investment Bank] must be enabled to play a significant role in maintaining Green Deal interest rates at the lowest possible level.[148]

Prashant Vaze from Consumer Focus told us that the potential Green Deal providers he was aware of might not be able to lend at low enough rates.[149]

88.  In Germany, KfW as a source of low cost finance has been instrumental in helping deliver 100,000 energy efficiency retrofits every year.[150] KfW provides subsidised loans to commercial banks, which then use this finance to grant loans for energy efficiency to individuals and businesses. The German Government sets the eligibility criteria for particular energy efficiency schemes, which the commercial banks have to follow with their end-customers. A government guarantee reduces the cost of it raising finance, which it passes on to commercial banks. KfW also reduce the rate at which they lend to the commercial banks using scheme-specific subsidies, and allows commercial banks to add only a limited additional rate margin to cover their lending risk and costs. KfW has cleared with the European Commission that such subsidised lending does not contravene the Commission's state aid rules. This loan-based approach to energy efficiency in Germany engenders a more stable efficiency programme environment, in place of a potentially more volatile grants-based system which might only operate for a short period.[151]

89.  TransformUK and E3G told us that the Green Deal carries unquantified risks around demand, default rates on loans and the performance of energy efficiency measures in the home. Because of this, they concluded that it was unlikely that banks would provide any finance to the first tranche of Green Deal projects.[152] A number of witnesses suggested therefore that the Green Investment Bank could also help provide the Green Deal with a 'proof of concept'. This would enable private investors to see the concept in practice and evaluate the potential scale of opportunity and risks of investing. It could open the door for greater private sector investment.[153] However, the Business Secretary told us that he had not envisaged the Green Investment Bank being at the heart of the Green Deal, but he was flexible and open-minded and would not rule out such options.[154]

90.  It is not clear how the three components necessary for the Green Deal will be made available: sufficiently low-cost financing for households, individual loans aggregated to a size attractive to large investors, and loan terms sufficiently long enough to satisfy the Green Deal 'golden rule'. The Bank could be an important source of additional capital for the Green Deal and there should be much more joined up thinking between BIS and DECC on the potential role of the Green Investment Bank in this area. The Government should conduct an urgent review to consider additional potential sources of finance for the Green Deal, and should not rule out the opportunity for the Green Investment Bank having a role. The Government should examine what lessons might be learned for the Green Deal from KfW in Germany, which has dealt successfully with similar requirements.

A level playing field

91.  The Government has stated that the Bank will make investments on a commercial basis. That has implications for its likelihood of 'crowding out' other investors, and whether EU state aid rules are respected.


92.  To the extent that any investments by the Bank are not subsidised by the Government, it will need to make a commercial rate of return on such investments, correlated to the risk involved. If it does not, institutional investors will not support it. Philip Wolfe from the Aldersgate Group did not think that he:

[...] would see the Bank investing in projects for which the returns are so low that it doesn't make a sensible return. I think what we're looking at are projects where the return is a good commercial return, but ones that might not get taken up by traditional commercial banks, because of their view of the perceived political risk, […] lack of familiarity with the technologies or perceived regulatory risk.[155]

93.  The Co-operative Group, active in low-carbon finance, told us that a commercial rate of return was achievable:

We lend at commercial rates. We don't subsidise it […] We go to places that other banks don't go, but not to achieve sub-market returns. It is because we truly have a triple bottom line analysis. It is social, environmental and financial. Other banks don't have that triple bottom line. It doesn't mean it's not economic to do: it is. We make money, but it's about more than that. It is about creating the environment and it's about creating sustainable social benefits.[156]

Indeed, the Co-operative Group told us that there is already demand for commercial low-carbon investments:

[Renewable energy and clean technology] […] is about 5% of our corporate asset book. We have a work-in-progress schedule in excess of £1 billion […] To be honest, that's without even going out and trying the market. That is just word of mouth from schemes that we've done already. I think there is a huge untapped market. But you are right: it is lack of capital.[157]


94.  It is important that the Bank does not compete with existing sources of finance ('crowd' these out) or inadvertently reduce private sector investment through its actions. RenewableUK believed that:

[...] care should therefore be taken to ensure that any 'green bank' does not compete directly against private banks. Given the better terms that an institution with the Government behind it would be able to offer, this would be unfair competition and result in a reduction of capital put into the market by the non-Government backed banks.[158]

95.  However, some witnesses doubted whether the Green Investment Bank would threaten existing finance. Ingrid Holmes from E3G told us that this is a low risk as there is not much investment going on.[159] Green Alliance drew on experience from the European Investment Bank, KfW and other development banks and believed that there need not be crowding out by a development bank, but suggested that it should be clear in legislation that such crowding out would be against the Bank's investment criteria.[160]

96.  We conclude that the risk of crowding out should not be significant, given the size of the green funding gap. It might arise, however, from providing finance at a lower rate than commercial banks are willing to offer. The Green Investment Bank would be closer to government and therefore might have a different perception of political and regulatory risk. For instance, Consumer Focus referred to a successful index-linked savings certificate, offered by National Savings and Investments, which was withdrawn in July 2010 because of the crowding out effect this had on less attractive savings products offered by commercial banks. [161]

97.  The Green Investment Bank Commission suggested that one way of reducing the risk of crowding out would be to set the Green Investment Bank a clear set of operating principles. It suggests that such operating principles might cover:

  • Wherever private sector activity is viable, the private sector, banks and investors should lead and execute deals. In these circumstances, the Green Investment Bank would not take the lead in originating, sponsoring or structuring investments. Rather it would co-invest in opportunities brought to it by the private sector. The Bank would commit the minimum resources required to support these functions.
  • The Green Investment Bank would operate only where its action would serve to achieve a result that would not have otherwise been possible. The Bank would participate only where involvement would accelerate market activity and where its absence would leave activity unviable.
  • The Green Investment Bank should aim for commercial rates of return from its banking operations. Its banking operations should be self-funding, raising funds from the capital markets and investing commercially with the private sector. Those projects with the largest impact and highest speed to market should be prioritised.[162]

98.  The Government could establish mechanisms to monitor whether the Green Investment Bank crowds out existing investors, as this could in time reduce the net impact of the finance made available by the Bank as the funding gap diminishes. The Government could then require the Bank to change its investment priorities if that monitoring revealed crowding out. Adopting the Green Investment Bank Commission's set of operating principles for the Bank would help ensure it does not crowd out private sector investment. We also support a suggestion from Scottish and Southern Energy that the Green Investment Bank should have a clear exit strategy that would encourage it to gradually withdraw its support from an area once the private market has become comfortable with the risks involved.[163]

99.  There are clear risks from setting up the Green Investment Bank as a commercial operation, as demonstrated by CDC (formerly the Commonwealth Development Corporation). In October 2010, the Secretary of State for International Development announced the Government's intention to reform CDC radically to increase its development impact. The incentive structures in place meant that CDC was more financially than developmentally focused, and it pursued the greatest return for the lowest risk.[164] He told the International Development Committee recently that DfID had "sometimes […] been too remote a shareholder".[165] We questioned the Business Secretary as to whether the lessons from CDC had been learned and would be borne in mind when designing the Green Investment Bank. He told us that:

[...] I think the dangers you have described are not relevant in this particular case. [The Bank] will have a very clear mandate to promote environmental projects that would not otherwise be met in the market. Whereas I think the CDC was a rather different case, where they were operating almost entirely as a market institution.[166]

100.  We recommend that BIS works closely with DfID to learn lessons from the latter's oversight of CDC and from the International Development Committee's recent report, to develop an appropriate mandate and incentive structure for the Green Investment Bank, to ensure the Bank continues to help the UK meet its carbon and renewables targets and delivers environmental benefits, as well as growing the Bank's financial capital.


101.  Another important consideration for the commerciality of the Green Investment Bank's investments are 'state aid' rules. The European Community bars financial support from a public body—'state aid', in whatever form—which could distort competition and affect trade by favouring certain undertakings or the production of certain goods. However, there are a number of exemptions which enable EU states to provide financial support, mainly services which the market fails to provide properly.[167] The European Commission is responsible for approving proposed 'state aid' exemptions. Where the Commission finds aid to be illegal, it is under a legal obligation to seek the recovery of the aid from the recipient, plus interest, and competitors may also seek legal action for damages. EDF energy told us that, when deciding on the types of support it provides, the Green Investment Bank should ensure that it acts commercially:

[...] the [Green Investment Bank] should not look to provide debt finance to projects at the development stage. To do so could be considered to be a subsidy given that commercial lenders are generally not prepared to finance the riskier large scale projects during their early stages. [It] would therefore not be able to demonstrate that it was behaving commercially and may therefore be considered to be providing State Aid.[168]

102.  Since 2007, KfW in Germany has had a memorandum of understanding with the European Commission, to allow energy efficiency subsidies from the German Government to be fed through KfW, allowing it to offer lower interest rates than other banks (Annex A). We questioned BIS about the contact the UK Government has had with the European Commission on state aid exemption for the Green Investment Bank. Janice Munday, the responsible director in BIS, told us last month that:

[...] no, we have not talked directly to the Commission. To have that sort of detailed discussion we would have to have far more detail about the products and the terms on which Green Investment Bank would be investing in the market, and we are not at that stage yet. We are engaging significant external help to help us with the work in preparing the case to go to the Commission. It is a complicated and quite extensive process, so we are gearing up for it, but we have not started.[169]

Getting state aid exemption approval can be a lengthy process. The Business Secretary acknowledged that this could take 18 months to 2 years, but that this would not impact on the Green Investment Bank operating in a limited capacity by investing on equal terms with private investors.[170]

103.  The Government acknowledges that it can take up to two years to get state aid exemption approval. We are therefore surprised that it has not discussed with the European Commission the parameters of the Green Investment Bank's operations, as this could be a restricting factor on what the Bank would be able to do. We recommend that the Government starts negotiations immediately with the European Commission to ensure that required prior approval is secured for the Bank.

UK or overseas investments

104.  The issue of whether the Green Investment Bank invests in the UK or overseas hinges on two key factors: the need to meet domestic emissions and renewables targets, and delivering green growth in the economy.

105.  A Green Investment Bank, following a commercial approach, might consider investing overseas if that offered more financially attractive investment opportunities or more cost-effective routes to reducing carbon emissions than investment in the UK. In Germany, for example, KfW's overseas investments generally achieve about eight times as much emissions reductions per Euro than it does through its domestic lending, reflecting the existing generally high level of energy efficiency within Germany.[171] David Paterson from the National Association of Pension Funds told us that investors have no preference about where in the world they invest in green projects; they are primarily concerned with achieving returns commensurate with risk.[172]

106.  There is an imperative, nevertheless, for reducing emissions in the UK itself. The UK has a commitment under the Climate Change Act 2008 to cut carbon emissions by at least 34 % by 2020, and at least 80 % by 2050, compared to a 1990 baseline. The Climate Change Act also included a requirement to publish five-year carbon budgets, starting in 2008, to deliver the reductions required to meet these targets. The first three of these carbon budgets were approved by Parliament in May 2009.

107.  The Committee on Climate Change was set up by the Act to provide independent advice on setting these targets. In its December 2010 report, which provided advice on a fourth-period carbon budget, the Committee warned that new policies will be required to ensure that carbon budgets are achieved in the 2020s and to lay the foundations for further reductions in the 2030s and 2040s. It highlighted that:

[...] progress in reducing emissions during the first budget period has so far primarily reflected the recessionary effect, and it remains essential to achieve the step change in the pace of underlying emissions reductions that we called for in both the October 2009 and June 2010 progress reports. New policies to drive the step change include approaches to energy efficiency improvement in residential and non-residential buildings, roll-out of smart meters, consumer behaviour change in transport, and more widespread use of carbon-efficient practices on farms.[173]

The Committee on Climate Change stated that in the long term the UK will need to achieve emission reductions through domestic action, and not through buying carbon emissions credits from other countries, as the cost of carbon will increase and there will be greater competition from other countries to buy carbon credits:

[...] at present and for the foreseeable future, there may exist opportunities to buy carbon credits internationally at a price below the marginal cost of emissions reduction in the UK, by mid-century global prices will need to have reached several hundred £s per tonne if climate objectives are to be achieved [...] and some current sellers of emissions credits (e.g. China) are as likely to be buying credits from the UK as vice versa.[174]

108.  The Government expects green growth to be a major future driver of the economy, as it attempts to build 'a new and more responsible economic model'.[175] The National Infrastructure Plan noted the importance of energy networks and systems, transport, and waste and water management infrastructure as critical for economic growth.[176] However, there is a long way to go. The UK is lagging behind other countries for investment in green infrastructure. According to research by Ernst and Young, the UK is the fifth most attractive country for investment in renewable technologies, behind China, the USA, Germany, and India.[177] If properly designed, some witnesses argued that the Green Investment Bank could 'play a transformational role in building a highly competitive low carbon economy and catalyse a green jobs boom'.[178]

109.  The World Development Movement noted that the environmental goods and services sector is predicted to create around 50,000 jobs a year, if the Green Investment Bank delivers the necessary growth.[179] The Government's Local Growth White Paper sets out the following national green growth priorities, on which the Government hopes to engage with local enterprise partnerships:

  • assisting low carbon, green innovation;
  • developing green infrastructure;
  • stimulation of supply chains in green markets; and
  • bringing together industry in green 'clusters'.

The Government is also conducting a review of what each part of government can do to address the barriers facing specific industry sectors.[180]

110.  The Government will bring together all the key elements for delivering the green economy into a single document, called the Green Economy Roadmap. Its aims will be to provide business and investors with certainty about the future policy landscape. It is being led by Defra with input from DECC and BIS. Defra's Business Plan envisages the Roadmap being completed by April 2011.

111.  Ingrid Holmes from E3G suggested that because the Green Investment Bank will take some time to establish itself, it should prioritise investments that are going to deliver maximum UK benefit.[181] The Bank should also have a role in drawing investment into the UK and there was a clear role for it to represent the UK overseas as well.[182] Philip Wolfe from the Aldersgate Group told us that:

I think [the Bank] will have an important role, bearing in mind that a lot of the other investors who we would like to see investing alongside it are looking at investments around the world and it, therefore, has a role in making the UK look like a more attractive place to be investing in the green economy.[183]

112.  The Government must use the opportunity provided by the 'Green Economy Roadmap' to set out ambitious policies to support green growth, aimed at making the UK a world leader. We urge the Government to develop this Roadmap and the Green Investment Bank in a joined up way, and set out explicitly the supporting role expected of the Bank.

113.  We already have a generously funded DfID overseas aid budget, and in a separate inquiry we are exploring the scope for a larger proportion of the aid budget to be dedicated to climate change and environmental purposes.[184] The Bank's focus should be on UK, rather than overseas investment, because that will be needed to deliver the UK's carbon targets. Helping the UK meet its carbon targets should be made explicit by linking the Bank's remit to the Climate Change Act. The Bank could also be given a coordinating role to channel investment into the UK from overseas.

The Green Investment Bank's relationship with existing low carbon focused government bodies

114.  The Green Investment Bank Commission reviewed the existing low carbon government landscape and found a disparate collection of institutions and funds, often with similar objectives and little accountability for the delivery of specific goals. The lack of co-ordination and common branding had made it hard for businesses and investors to navigate the bureaucracy.[185] The Commission suggested that rationalising existing bodies and funds[186] would radically improve service delivery, value for money and provide a source of funding for the Green Investment Bank. It concluded that the bodies, with an estimated annual budget of £185 million, and funds worth £2 billion, could be combined within the Bank.

115.  However, the Energy Technologies Institute, one of the bodies earmarked by the Commission for rationalisation, told us that it is neither a quango nor a grant giver. It is a partnership currently formed of six major global companies (BP, Shell, e.on, EDF, Rolls-Royce and Caterpillar) with government to pool technical and financial knowledge and financial capability.[187] As such, one of the partners said that the Energy Technologies Institute did not look suitable for merging with other government bodies.[188] Gordon Edge from RenewableUK agreed with the Commission that the government landscape is crowded and confusing, but told us that merging existing bodies will not provide the "game-changing" institution required:

It's going to squeeze a bit of efficiency out of not having quite so many quangos around. But we're talking about something else entirely here, which is: how do we channel new money into the mass build-out of these technologies? So it is a different institution that we're talking about here, in terms of being able to raise money on the private markets, and then use that for implicitly backed usage.[189]

RenewableUK cautioned that there was a risk of a hiatus in innovation investment if the different funding bodies, with their different staff and funding models, were brought together under one roof.[190] Scottish Power feared that innovation could be stifled as research and development activities might be made to compete for limited funds against projects with stronger and more predicable financial returns.[191] Ofgem told us that some of the essence of the various bodies and funds may be lost if brought together as they each serve slightly different purposes.[192]

116.  In light of these risks we asked Bob Wigley, Chairman of the Green Investment Bank Commission, about the rationalisation he proposed. He told us that:

It is important that the existing plethora of organisations, which has somewhat overlapping objectives, be rationalised over time. Is it fundamental to the creation of a Green Investment Bank? No. I think there are lots of other things the Green Investment Bank is going to do that are, frankly, probably more important.[193]

BIS told us that it was still examining this issue with DECC and reviewing the role of existing low carbon institutions and funds with the aim of improving efficiency and making them easier to navigate.[194]

117.  The rationalisation of current government low carbon institutions and funds within the Green Investment Bank is not crucial to raising funds to capitalise the Bank, but it could be helpful in the longer term. We welcome the Government's review of the institutions and funds involved, and as part of this the Government should examine what lessons might be learnt by the Bank from the Energy Technologies Institute partnership between private and public sectors.

Conclusions on the remit and oversight of the Bank

118.  The Green Investment Bank will have an explicit mandate to tackle the risk that the market cannot. This suggests many and varied areas that a Green Investment Bank could be active in. There are a number of interventions a Bank could make in a wide variety of areas, including equity, loans and risk-reduction products, and we have discussed a number of important considerations associated with these. Witnesses supported the Bank generally being free to decide on the right balance of investments, based on evidence on profitability, risk and the extent to which the investment reflected the green remit given to it.[195] The Green Investment Bank could be an important additional source of capital for the Green Deal. The Green Investment Bank should invest first in the UK, to deliver the UK's legally binding domestic emissions targets. By investing in the UK, the Bank could also be a catalyst for green growth and green jobs and help deliver on the Prime Minister's commitment for this Government to be the 'greenest ever'.

119.  Giving the Green Investment Bank the right remit and creating appropriate governance and oversight arrangements will be important for ensuring that taxpayers' money is not put at risk and that the Bank achieves what is expected of it. If the Bank is established as a corporate body, Parliament must be given a strong role in scrutinising its initial governance and remit. If an arms-length body, Parliament must be allowed also to examine its evolving strategy and operating principles. KfW in Germany has a supervisory board which includes ministers and parliamentarians. The Government should consider how Parliament might be represented on an 'advisory council' of the Green Investment Bank. The Bank's remit should include a requirement to consult the Committee on Climate Change and take its recommendations into account.

120.  The Green Investment Bank, as a centre of expertise, should be given the independence to decide on the projects to support within its given remit. The Government should not interfere in the day-to-day management and individual investment decisions. Adopting the Green Investment Bank Commission's set of operating principles for the Bank would help ensure it does not crowd out private sector investment.

121.  The Government should set the Green Investment Bank with a clear green investment mandate, to stop the Bank straying into more profitable but less green investments. In doing so, the Government should clearly define what it considers to be 'green investment'. But we caution the Government not to set out the role of the Bank too rigidly, to allow the possibility of the Bank supporting environmental protection schemes in due course where these can be determined to offer a commercial return in the long term.

65   Green Investment Bank Commission, Unlocking investment to deliver Britain's low carbon future, June 2010, p 37 & 38. Back

66 Back

67   Q 365 [Janice Munday] Back

68   Ev 133  Back

69   Q 372  Back

70   HM Government, The Coalition: our programme for Government, May 2010, p 9. Back

71   See article:  Back

72   Q 379 Back

73   Q 29 Back

74   Q 78 Back

75   Ev 134  Back

76  Back

77   Ev w19  Back

78   Department for Business, Innovation and Skills, Business Plan 2011-2015, November 2010. Back

79   Ev 135  Back

80   Ev 120  Back

81  Back

82   Ev 110  Back

83   Ev 108  Back

84   Ev 94, Ev 127  Back

85   Ev 110  Back

86   Ev 92; Q 108 [Ben Warren, Ernst & Young] Back

87  Back

88   Q 331 Back

89   Q 145 Back

90   Q 144 Back

91   Ev w49  Back

92   Q 328 Back

93   Ev 127  Back

94   Q 285 Back

95   Ev w58  Back

96   Green Investment Bank Commission, Unlocking investment to deliver Britain's low carbon future, June 2010, p xiv. Back

97   Ev w49  Back

98   Ev 108  Back

99   Ev w35  Back

100   Ev w34  Back

101   Q 39 Back

102   Ev w7  Back

103   Q 116 Back

104   Ev 120  Back

105   Q 154; Ev 92  Back

106   Ev 139  Back

107   For example, the Brazilian Development Bank (BNDES) offers loans aimed at the reforestation, conservation and forest recovery of degraded areas. Back

108   Ev 98  Back

109   Ev 92  Back

110   Ev w35  Back

111   Ev 108 [EDF Energy], Ev w29 [Energy Services and Technology Association] Back

112   Q 23 Back

113   Q 50 Back

114   The carbon budget system involves reducing operational emissions from individual departments and also emissions from sectors of the economy that a department has responsibility for (for example Defra would be responsible for reducing emissions from agriculture). The system is currently at an early stage of implementation, and the current Government is reviewing it. Back

115   HM Government, The Coalition: our programme for Government, May 2010, p 17. Back

116   HC Deb, 18 October 2010, col 42-46WS Back

117   Q 316 Back

118   Qq 217-219 Back

119   Q 332 Back

120   Q 312 Back

121   Qq 312, 321 Back

122   Q 317 Back

123   Ibid. Back

124   HM Government, The Coalition: our programme for government, May 2010, p 17. Back

125   Green Investment Bank Commission, Unlocking investment to deliver Britain's low carbon future, June 2010, p 22.  Back

126   Green Investment Bank Commission, Unlocking investment to deliver Britain's low carbon future, June 2010, p 22. Back

127   Q 330 Back

128   Q 100 Back

129   Qq 282, 318 Back

130   Qq 169-170 Back

131   Q 241 Back

132   Ev 94  Back

133   Q 392 Back

134   Ev 115  Back

135   Green Investment Bank Commission, Unlocking investment to deliver Britain's low carbon future, June 2010, p 7. Back

136   Ev 120  Back

137   Green Investment Bank Commission, Unlocking investment to deliver Britain's low carbon future, June 2010, p 7. Back

138   Ev w38  Back

139   Ev w56  Back

140   Ibid.  Back

141   Ev 101  Back

142   Committee on Climate Change, Meeting Carbon Budgets - ensuring a low-carbon recovery: 2nd Progress report to Parliament, June 2010, p 89 & 90. Back

143   Ev w38  Back

144   Ev w29  Back

145  Back

146   Ibid. Back

147   Ev w56  Back

148   Ibid.  Back

149   Q 158 Back

150   Ev 120  Back

151   Annex A. Back

152   Ev 120  Back

153   Ev w62  Back

154   Q 373 Back

155   Q 21 Back

156   Q 153 Back

157   Qq 151, 154 Back

158   Ev 110  Back

159   Q 109 Back

160   Ev 127  Back

161   Ev 101  Back

162   Green Investment Bank Commission, Unlocking investment to deliver Britain's low carbon future, June 2010, p 14 & 15. Back

163   Ev w35  Back

164   HC Deb, 12 October 2010, col 14-16WS Back

165   International Development Committee, Fifth Report of Session 2010-11, The Future of CDC, HC 607, paragraph 87. Back

166   Q 360 Back

167  Back

168   Ev 108  Back

169   Q 347 Back

170   Ibid. Back

171   Annex A Back

172   Q 132 Back

173   Committee on Climate Change, The Fourth Carbon Budget: Reducing emissions through the 2020s, December 2010, p 13. Back

174   Ibid., p 18. Back

175   HM Government, The Coalition: our programme for government, May 2010, p 9. Back

176   HM Treasury and InfrastructureUK, National Infrastructure Plan 2010, October 2010, p 5. Back

177$FILE/EY_RECAI_issue_27.pdf; Q126 [Ben Warren] Back

178   Ev 120  Back

179   Ev w49  Back

180   HM Treasury and the Department for Business, Innovation and Skills, The path to strong, sustainable and balanced growth, November 2010. Back

181   Q 132 Back

182   Q 79 [James Cameron, Climate Change Capital]  Back

183   Q 29 Back

184  Back

185   Green Investment Bank Commission, Unlocking investment to deliver Britain's low carbon future, June 2010, p 18. Back

186   The Carbon Trust, Technology Strategy Board, Energy Technologies Institute, International Environmental Transformation Fund, Ofgem Low Carbon Network Fund, Environmental Transformation Fund, Strategic Investment Fund, UK Innovation Investment Fund, and the Marine Renewables Deployment Fund. Back

187   Q 36 Back

188   Ev 108 [EDF energy] Back

189   Q 15 Back

190   Ev 110  Back

191   Ev 131  Back

192   Q 36 Back

193   Q 78 Back

194   Q 395 Back

195   E.g. Green Alliance (Q 22) Back

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