UK Infrastructure Bank sets out green investment priorities

The UK Infrastructure Bank has this morning launched its first strategic investment plan, confirming it plans to invest more in clean energy than in any other part of the economy.

The £22bn roadmap, unveiled this morning by the bank’s CEO John Flint, sets out how the institution intends to distribute its initial round of government-backed investment into the UK economy over the next five to eight years.

It identifies five “priority” sectors for investment – clean energy, transport, digital, waste, and water – but notes investment will not be spread equally across the different categories.

“We expect clean energy will be the largest sector in our portfolio, reflecting its importance to the UK’s net zero and energy security ambitions,” the document notes. “The remainder of our portfolio will be more heavily weighted towards transport and digital. Both sectors are crucial to linking people and places and spreading opportunity more equally. Water and waste are likely to be our smallest sectors because this is where we currently see the fewest investment opportunities.”

Flint said the plan marked the first time the bank had set out how it intended to use its investments to reduce emissions. “We want our investments to shape the future and, for the first time, we’re highlighting where we expect the biggest investment opportunities will be to deliver on our mission to tackle climate change and regional inequalities,” he said.

Some £8bn has been earmarked for debt and £10bn will be equity in the form of guarantees, and £4bn is being set aside for local authority, the update confirms.

Since launching one year ago, the bank has closed seven deals worth £610m, and the Strategy confirms it is the process of identifying a pipeline of “investible infrastructure projects” for both corporate and project finance.

The Strategy also confirms the bank’s plans to finance the deployment of existing green infrastructure, such as renewable technologies and building energy efficiency improvements, while simultaneously supporting less mature decarbonisation solutions and technologies, such as low carbon hydrogen fuel and carbon capture, usage and storage ( CCUS projects.

In the foreword to the Strategic Plan, Flint claimed the public investment bank could “lead the market” when it comes to tackling critical green infrastructure challenges, such as the roll out of electric vehicle charging, the green retrofitting of buildings, and the deployment of zero emission buses.

The strategic plans also commit the bank to monitoring evolving opportunities for investment in nature-based solutions that can help tackle climate change.

Flint stressed the institution would be focused on shoring up UK energy independence in the wake of soaring energy prices exacerbated by Russia’s attack of Ukraine. “The war in Ukraine is an economic earthquake that underlines our mission and the strategic importance of energy security to the UK’s economic future,” he said. “Rising energy bills also show how in the long-term we need to increase our domestic supply of energy.”

The bank has also confirmed it is to now launch a major recruitment campaign, noting that it had 80 roles to fill across banking, legal, risk, corporate, and local authority functions over the next six months.

The Bank’s advisory function is expected to launch this summer, with targeted pilot projects set to be launched over the next six months, according to the update.

Chris Grigg, UK Infrastructure Bank chair, hailed the institution’s significant progress to date, but noted there was “much still to be done”.

“As our excellent group of new non-executive directors and executives arrive over the summer, they have a real opportunity and indeed a responsibility to drive the continued roll out of the Bank’s strategy and to help it deliver on its core mission,” he said.

John Glen, economic secretary to the Treasury, welcomed the bank’s new roadmap. “A year after its launch, it’s great to see the bank delivering on its mandate to accelerate investment in infrastructure, helping to level up across the UK and tackle climate change,” he said. “This new strategic plan sets out how the bank will deploy £22bn of investment into the UK economy over the coming years, boosting growth and supporting jobs.”

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