IN HIS younger days, Shaun Kingsbury wanted to be an airline pilot, but these days he is running a bank, a high-flyer at a new Edinburgh institution that last week finally took off.
The official launch of the Green Investment Bank (GIB) at Heriot-Watt University attracted a robust gathering of 200 industry and financial figures keen to hear more about this latest addition to the Scottish banking firmament.
It joins the commercial and retail banks in giving Edinburgh a rare spectrum across the sector, which has shown its ability to reinvent itself after the troubles of the recent past.
For now GIB has just five staff working in a corner of the Edinburgh City Council head office in Waverley Court. That number will rise to 50 next summer, matching the payroll at GIB’s London office, but the important number is the £3 billion budget.
It is taxpayers’ money and Kingsbury – fully aware of the billions of public cash pumped into the big banks that may never be repaid – is under orders to make sure he gets a healthy return.
Perhaps for that reason it is not venture funding. The bank will not be backing risky early-stage ideas, and will be focusing instead on promising wind, energy efficiency and waste recycling projects that have already proven they have a viable proposition.
The UK requires £20bn of investment in the green energy sector each year for ten years, but currently invests half that sum. GIB is designed to help plug that gap, which the commercial banks are unable to fill, not least because projects are usually long term and they are struggling to provide long-dated loans. Kingsbury says his bank will therefore play a key role in whether projects go ahead or remain on the drawing board. “If the banks are only able to provide short-term debt it is a risk for a developer who will have to refinance too early,” he says. “He may decide not to go ahead. But we can step in and provide the extra finance and get things built.”
Kingsbury, 46 last week, is a Belfast man who lives in Surrey and will be dividing his week between his two offices in Edinburgh and London. Despite his airline amibitions, he joined the oil and gas industry, running businesses for Shell. Now he’s enjoying being in at the start of a new venture.
“This is the chance to do something transformational. It is a tremendous opportunity to start a bank,” he says.
Inevitably with any project launched by a government, there is a political debate around the new bank. Its split location has given rise to claims that the coalition deliberately wanted to make a point about retaining Anglo-Scottish connections.
Indeed, Business Secretary Vince Cable said in his address on Thursday that “having the headquarters in Edinburgh is a powerful vote of confidence in the Union”.
As all the money will come from Westminster and not a penny from Holyrood, he may have a point.
Kingsbury refuses to get involved in the political debate, preferring to focus on how he can spend his money. The Scottish government is involved via a “pipeline” venture called the Scottish Green Investment Portfolio, which will help identify projects. A small number have been backed via four funds and the first direct, large-scale investment should be announced by the year end.
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Tuesday 21 May 2013
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