Vince Cable: Government investment boosting green economy

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The UK’s Green Investment Bank (GIB) is the first institution of its kind, specialising exclusively in investing in the green economy (although the Australians have launched an equivalent body based on the GIB).

Its mission is to attract private capital to infrastructure projects that deliver both strong financial returns and positive green results.

We require large investment to make the UK economy green – with an estimated £200 billion needed to update just our energy infrastructure before 2020. But green technologies also represent a huge opportunity for our country.

Since opening for business last October, the Green Investment Bank has already committed £635 million to 11 deals with a total value of £2.3 billion. None of these deals would have been completed without the public money injected by the bank, and the private investment it has thereby mobilised. I expect to announce soon the first major Scottish project though Scotland is already seeing investments via a wind power equity fund.

Projects in our three priority areas – waste treatment, offshore wind and energy efficiency – have all been approved. To date, every £1 from the bank has attracted, on average, £3 of additional investment.

At a time when public resources are scarce, the bank demonstrates the value of the government’s partnership approach to investment. There is £3bn of state funds to spend up to April 2015 – money which, through wise application, will demonstrate the commercial case for green infrastructure investments and help to deliver the UK’s green transition. The bank has a strong transaction pipeline in place for 2013-14.

The early success of this financial institution makes another case too – for the ongoing value of our political union. Headquartered in Edinburgh, with its own thriving green sector and long-established expertise in asset management, the bank also relies on a transaction team in London with first-class links to the City. This set-up illustrates the importance of harnessing our strengths across the UK in pursuit of mutually advantageous growth opportunities.

• Vince Cable is secretary of state for business, innovation and skills.