The UK Infrastructure Bank, which has been founded to help tackle climate change and support regional and local economic growth, launched on 17 June 2021. The UK Infrastructure Bank is operationally independent and works with HM Treasury. As part of its opening, the Bank has published a framework document which sets out its relationship with government
The Bank will be tasked with accelerating investment into ambitious infrastructure projects, cutting emissions and levelling up every part of the UK.
First announced alongside the government’s Spending Review in 2020, the Bank will help to finance important projects in every region and nation of the UK in sectors including:
o Clean energy,
o Transport.
o Digital.
o Water, and
o Waste.
The UK Infrastructure Bank will have an initial £12 billion of capital to deploy and will be able to issue £10 billion of government guarantees, helping to unlock more than £40 billion of overall investment.
Working in partnership with local government and the private sector, the Bank will harness investment tailored to the needs of specific infrastructure projects, offering a range of financing tools including debt, equity, and guarantees.
The key characteristics of the UK Infrastructure Bank are:
o The Bank is launching in an interim form and will scale up in capability and capacity over time.
o From 17 June 2021 the Bank will be able to issue loans, equity, or guarantees to private projects. The Bank will start lending to local authorities later in the summer.
o The UK Infrastructure Bank will form an essential part of the government’s National Infrastructure Strategy and will complement the existing expertise of the Infrastructure and Projects Authority (IPA) and the National Infrastructure Commission.
o At Spending Review 2020, the government announced the next phase of its infrastructure revolution with a commitment to spend £100 billion of capital expenditure this year (2021-22) which is a £30 billion cash increase over the last two years.
o The Bank’s £22 billion of financial capacity will consist of £5 billion of equity, £7 billion of debt, and £10 billion of guarantees.
o HM Treasury and the UK Infrastructure Bank have entered into a Keep Well Agreement to ensure that the Bank has sufficient funds to be able to meet its payment obligations in full as they fall due.
o The Bank’s branding has been created by the in-house HM Treasury team.
The UK Infrastructure Bank has its own website, which can be accessed at this LINK.
For the full news item on the launch of the Bank, go to the GOV.UK website.
