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United Kingdom

United Kingdom

UK Green Investment Bank to launch in 2012-13

UK: The UK government's Green Investment Bank, which aims to help finance low carbon developments such as offshore wind, will begin operation in 2012-13, a year earlier than previously anticipated.

George Osbourne chancellor of the exchequer announced the GIB plans in today's budget
George Osbourne chancellor of the exchequer announced the GIB plans in today's budget

The government has pledged £1 billion initial investment, and plans to raise a further £2 billion through the sale of assets.

£775 million has already been raised through the sale of High Speed One, the company that owns the assets of the Channel Tunnel Rail Link.

The Treasury has no further details on what assets would be sold and when, but chancellor George Osborne said that the Treasury would plug the gap if the sales do not go ahead.

Some commentators are disappointed that the bank will not be able to borrow money until 2015-16. However, the bulk of the capital for offshore wind is likely to be needed for Round 3 projects after 2015.

The announcement was included in the UK government’s 2011 budget, which was unveiled today. Further details of how the bank will work will be published in May.

The government also announced a carbon price floor for the power sector to incentivise investment in energy infrastructure.

The price will start at around £16 per tonne of carbon dioxide in 2013 and move to a target price of £30 per tonne in 2020.

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