Government to tackle climate change with Infrastructure Bank

A UK Infrastructure Bank is set to launch in April, with tackling climate change one of its two core objectives.

On 3 March, Chancellor Rishi Sunak unveiled the latest Budget, outlining how the government, alongside addressing the immediate challenges of COVID-19, will act to create the conditions for an investment led recovery. Based in Leeds, the bank will provide financing to support the private sector and local authority infrastructure projects across the UK that help to address climate change, as well as supporting regional and local economic growth. It will have £22bn financial capacity to deliver on these objectives, £12bn of equity and debt capital, as well as the ability to issue £10bn of guarantees.

The government will also issue its first sovereign green bond in the summer, or green glit, with further issuance to follow later in 2021 as the UK aims to build out a “green curve”. This will total at least £15bn, with a framework published in June.

Elsewhere, in a bid to spread investment across every part of the UK, the government will make an offer to support the Able Marine Energy Park on Humberside following the conclusion of a competition to upgrade ports infrastructure for the next generation of offshore wind, while a memorandum of understanding will be signed with Teesworks Offshore Manufacturing Centre on Teesside to support the development of another offshore wind port hub. It pledged £4.8mn to the Holyhead hydrogen hub and £27mn to the Aberdeen Energy Transition Zone, both subject to business case.

It also unveiled support for the development of new solutions to cut emissions and accelerate near-to-market low carbon energy innovations. This includes a £20mn programme to support the development of floating offshore wind technology, a £68mn UK-wide competition to implement several first-of-a-kind energy storage prototypes or technology demonstrators, a £4mn UK-wide competition for a first phase of a biomass feedstocks programme.