UK Green Investment Bank plans to launch £1bn Offshore Wind Fund

The UK Green Investment Bank (GIB) plans to launch a £1bn (€1.25bn) fund to acquire equity stakes in operational offshore wind projects in the United Kingdom. This is an important development for the UK’s offshore wind sector. With 3.6 GW of installed capacity, 1.4 GW in construction and a number of further projects in the pipeline, the UK sector is set to grow significantly in the coming years. To support that growth, it is vital that developers – typically large utilities – are able to refinance part of their investments in operating assets to reinvest in new developments. This requires a significant broadening of the number of long-term investors in UK offshore wind projects. Equity investments in operational wind farms can offer a compelling opportunity for investors seeking long-term, inflation-linked returns. These attributes can be well matched to the needs of long-term infrastructure investors such as sovereign wealth funds and pension funds. In May 2014 GIB received State Aid approval from the European Commission to promote and manage funds and other co-investment structures for mobilising upfront private sector investment into its designated sectors.

In 2013-14, GIB committed £668m (€832m) to 18 green energy projects, more than doubling the number of green projects it backed in its first year. GIB is now the most active investor in the UK’s green economy. An additional £1.9bn (€2.4bn) of private money has been committed to these projects alongside GIB’s own investment, taking the total to £2.5bn (€3.1bn) of new investment in the UK’s green economy in 2013-14.