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UK Infrastructure Bank - a timely boost from the Treasury
- AuthorTom Pemberton
In his 2021 Budget speech, the Chancellor announced the foundation of the UK Infrastructure Bank, as trailed by the Treasury last November. This is a very exciting development which it will be hoped will improve on the support previously provided, with its new focus on delivering the government’s social and environmental policy objectives.
The Bank will be launched this Spring and based in Leeds. It will be supported by £12 billion of initial capital provided by the Treasury and a further £10 billion in government guarantees. The Chancellor said that at least £40 billion of private finance could be unlocked by this initial support, and referred to the role of the new funding in supporting the Conservative Party’s “levelling up” agenda and the transition to net-zero, making it clear that it will only be used to finance projects that contribute to the “green industrial revolution”.
Complementing his announcement of the new Bank, the Chancellor also confirmed the planned launch of the UK's first sovereign green bond to be offered through National Savings & Investments (NS&I) later this year. This has been trailed by the government as a "world first". The green bond is intended to give UK savers the opportunity to support green projects while boosting their savings.
Following the Budget speech, the Treasury has released documents which confirmed that the government is also planning to issue at least £15 billion of green gilts in the next financial year. These will help to fund important infrastructure investment which will tackle climate change and other environmental challenges.
The announcements are consistent with the ambition of UK governments since the turn of the millennium to be at the forefront of the global effort to tackle climate change.
We will follow up with further comment on the new funding when details are released.
Tom has many years’ experience of advising clients involved in the procurement, management, design and delivery of high profile building and infrastructure projects in the UK and internationally in the transport, energy, power, waste, process engineering, leisure, residential, retail and office accommodation sectors. He specialises in drafting and negotiating development agreements, construction contracts, professional appointments, collateral warranties, guarantees, bonds, direct agreements and other ancillary documentation. Tom works closely with clients to identify their objectives and the risks associated with the project, and takes a pragmatic approach to drafting and negotiating contract terms to support the achievement of a successful outcome.
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This guide is for general information and interest only and should not be relied upon as providing specific legal advice. If you require any further information about the issues raised in this article please contact the author or call 0207 404 0606 and ask to speak to your usual Goodman Derrick contact.