The bank will be a key factor in the progression towards a green economy, helping to accelerate new private-sector capital into green infrastructure projects.
Edinburgh is the natural home of the bank, benefiting from and boosting Scotland’s international reputation in renewables amongst global businesses, pension funds and sovereign wealth funds, and delivering access to new funding, including the £103 million the Scottish and UK governments agreed to transfer from the fossil fuel levy.
For Scotland to benefit from the opportunities that can be created by the development of its renewable and low-carbon energy sources, its immediate priority is to attract the significant, sustained investment, amounting to billions of pounds, these developments will require.
These levels of capital investment are unprecedented, but access to sufficient capital is probably the most important factor in the installation and the development of renewable technologies in the current economic climate.
The Scottish Government’s 2020 Routemap for Renewable Energy says £30 billion of investment will be required to achieve the 2020 target of a 42 per cent reduction in CO2 emissions.
Scotland and the UK are attractive markets for investment in renewable electricity. The UK has risen from sixth to fifth on the latest Ernst & Young Country Attractiveness Index report for overall attractiveness for renewables and remains top of the offshore wind index, with progress on offshore wind in Scotland a main reason.
Delivering this investment and channelling the necessary public-sector funds into renewable energy is where the Green Investment Bank has a key role to play, commencing its work as soon as possible. With initial capital of £3bn, the UK government must consider whether the bank’s borrowing powers will be needed sooner than the projected April 2015 date.
Maximising the value of Scotland’s renewable assets is a key priority in rebuilding the Scottish economy. The Green Investment Bank is a significant development in accelerating Scotland’s economic recovery, creating jobs and helping to deliver a sustainable energy future.
• James Alexander is senior policy and communications manager at the Scottish Council for Development and Industry.