Grant Thornton sceptical about green investment fund
If you are writing on the Budget announcement about
plans to create a Green Investment Fund, please consider the
following comment from Nathan Goode, Head of Energy, Environment
and Sustainability at Grant Thornton UK LLP:
Alistair Darling today announced plans to create a new state
fund backed by £2bn of public and private money to help finance
companies planning to build green energy projects and high-speed
rail links. But the plans risk further complicating an already
murky investment landscape for infrastructure finance in the UK and
the impact in terms of available funding is likely to be limited
says Grant Thornton UK LLP.
Nathan Goode, Energy Environment and Sustainability Partner at
Grant Thornton UK LLP says: "This Government still seems to think
that pretending to throw money at a problem is the best way of
fixing it. Instead of working on creating clearer conditions for
effective infrastructure investment, another theoretical pot of
money has been lobbed into the deepening quagmire of funding
initiatives and support mechanisms in the UK.
"The numbers look great but as Scotland knows, £2bn barely buys
you a bridge. The term "Green Bank" has interesting echoes of the
Conservatives' recent document "Rebuilding Security". The
difference is that the Conservatives propose a Green Investment
Bank to amalgamate the various public funding sources and to act as
an intermediary whereas this looks like another standalone
initiative alongside a host of others.
"We need much more clarity about the plans for a Green Bank and
where the private sector money is coming from before we can take a
view on the likely impact. When will money from this source find
its way to where it's supposed to go given that it is predicated
not only on Government asset sales but also matched funding from
the private sector?
"Rather than setting up a potential competitor to existing
financing sources, we think the Government could have used the
fiscal regime to develop tax incentives which are of sufficient
scale to attract investment, like the green incentives in the US or
the kind of inward investment regime successfully applied in
Ireland in the 1980s and 1990s. The proposals, on the other hand,
create another body tasked with raising funding and administering
investment, with all the overheads and time lags that this
implies.
"Without greater detail the market is bound to be sceptical
about the Green Bank's role and its ability to add real value" says
Goode.
ENDS
For further information please contact:
Nicola Daley at Grant Thornton press office on 020 7728 2244