Finance

UK Green Investment Bank: New Models in Renewable Energy Finance

The UK Green Investment Bank (UKGIB) became operational in October 2012, supported by £3 billion (approximately $5 billion) of government money. As part of a multifaceted climate change strategy enacted by the United Kingdom, the bank was founded with a mission of “accelerating the UK’s transition to a more green economy, and creating an enduring institution, operating independently of government”. With an experienced, professional management team in place, the UKGIB’s immediate task was to ‘crowd in’ private sector funding on new large-scale clean energy infrastructure. But while the strategic mandate for the bank was clear, a series of tactical issues remained about how to select new investments and manage its growing investment portfolio. For instance, how would the team be able to manage conflicting public and private interests? What specific type of investments would best counter market scepticism about investing in renewable energy projects? Most importantly, what investment evaluation framework would enable them to deliver on their vision of being both ‘green and profitable’?

 

Topics/Industry: cleantechcost of capitalpublic private partnershipsrenewable energy investmentsrisk vs returnWACC

Publication date: 01/01/2015

Published by: Centre for Climate Finance and Investment

Authors: Charles Donovan, Chris Corbishley

Length: 17 pages

Geography: UK

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