Green bank makes biggest investment in wind farms

THE Green Investment Bank yesterday unveiled its biggest pay-out since its launch with the £461 million backing for two offshore wind projects.

Chief executive Shaun Kingsbury said GIBs investments were helping to drive down the cost of energy. Picture: PA
Chief executive Shaun Kingsbury said GIBs investments were helping to drive down the cost of energy. Picture: PA

The investments represent a vote of confidence in a sector that has suffered a few setbacks with projects cancelled and energy company SSE reducing its commitment to renewables.

State-backed GIB, based in Edinburgh and London, is investing £241m alongside Japan’s Marubeni Corporation in the Westermost Rough wind farm off the coast of East Yorkshire. It will acquire a half stake in the project.

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Westermost Rough, currently in the early stages of construction, will use turbines almost twice the size of most of those currently operating in UK waters, and will generate enough power for 200,000 homes.

It is also acquiring 10 per cent of the Gwynt y Mor project off the coast of North Wales for £220m from RWE Innogy. This is the biggest of its kind under construction in Europe and, once operational, will generate enough electricity for 400,000 households.

Shaun Kingsbury, chief executive of the GIB, said: “The UK has ambitious plans to build on its position as a world leader in offshore wind. We have two roles to play in supporting those plans: firstly, to directly invest to help developers recycle their capital into the next wave of new renewable energy projects; secondly, to invest on fully commercial terms to create a demonstration effect which others will follow.”

The UK Green Investment Bank was launched in November 2012 with £3.8 billion of funding from the UK government and is the first bank of its kind in the world. It has invested £1.35bn in 18 months, supporting projects worth £4.5bn. Of this total, £670m has been committed so far this year. Yesterday’s investment makes wind energy the largest recipient of support.

Kingsbury said the bank’s investment strategy was now maturing. It is a provider of debt and equity, both at commercial rates.

“We are helping to drive down the cost of energy, create jobs and a supply chain in the UK,” he said. He noted recently withdrawn projects but said others, such as investment by Siemens in turbine manufacture, meant the industry was continuing to thrive.

Business Secretary Vince Cable said: “The Green Investment Bank is playing a game-changing role in financing our transition to a green economy.

“The bank has now invested well over £600m in five offshore wind farms and mobilised £1.3 billion of total funding. This industry has the potential to generate thousands of new skilled jobs and billions in business investment.”

Energy and Climate Change Secretary Ed Davey, said: “The UK is number one in the world for investment in offshore wind.

“This news is proof of the strength of investment in British energy infrastructure – and proof that the government’s strategy is working, supporting green jobs across the country and delivering secure energy supplies for the future.”

He said £34bn worth of investment has been announced since 2010 thanks to our electricity market reforms which give investors long-term certainty.