The headquarters of the U.K.’s Green Investment Bank will be in Edinburgh, with the main transaction team based in London, Business Secretary Vince Cable said.
The bank is expected to be fully operational later this year subject to getting European Commission approval for state aid, Cable said in an e-mailed statement today. Most of the 50-70 jobs will initially be in London, though the employees are eventually expected to be split equally between the two cities.
“Harnessing the strengths of Edinburgh and London will support the Green Investment Bank’s ambition to become a world leader,” Cable said. “Edinburgh has a thriving green sector and respected expertise in areas such as asset management. London, as the world’s leading financial centre, will ensure that the transaction team can hit the ground running.”
The bank, which will be started with 3 billion pounds ($4.7 billion) of state money, is designed to spur investment in carbon emissions-cutting technologies such as wind power. The government is seeking to meet its pledge to be the “greenest” ever while cutting spending to curb a record budget deficit.
The U.K. is aiming to accelerate private-sector investment in green energy to meet a goal of getting 15 percent of its energy from renewable sources by 2020. The semi-autonomous government in Scotland plans to generate 100 percent of its electricity requirement from such sources by that year.
The bank may borrow against its capital to lend a further 15 billion pounds, the government said. It won’t be able to tap the market until 2015 or 2016, and only then if the U.K.’s debt is falling as a proportion of economic output.
U.K. utilities need to spend as much as 200 billion pounds by 2020 to replace aging power plants and upgrade the electricity grid as the U.K. shifts to a low-carbon economy, according to energy regulator Ofgem in October 2009.
Until European Commission approval is obtained, the investments, which will start in April, will be handled by a team in Cable’s department, the statement said.