Edinburgh 'ideal' for Green Investment Bank

The bank will use public money to help firms finance early-stage renewable energy schemes

Edinburgh would be an ideal home for the Green Investment Bank (GIB) being set up by the UK government, ministers have heard.

Business Secretary Vince Cable and Scottish Secretary Michael Moore met business leaders in Westminster to discuss the Edinburgh proposal.

Supporters argue it has the necessary expertise to be the bank's HQ.

The GIB is being set up with £3bn of public money to help firms finance early-stage renewable energy schemes.

The alliance of Scotland's finance sector, power and renewable energy firms and universities claims Edinburgh has the required financial, energy and research expertise and the GIB would lack impact and openness if it were located in London.

The bank would use the money markets in a similar fashion to regular banks but would utilise the profits to invest in low-carbon energy resources.

Its start-up capital is intended to match £15bn of private sector funding over the next four years. After 2015, it should have powers to borrow more extensively from the private money markets.

Only about 40 jobs are envisaged with the headquarters, but the campaign group argued that many more would be brought to Edinburgh as it established itself as the centre for building up expertise in the financing of renewable energy.

The business case for an Edinburgh headquarters was based on the Scottish capital being the fourth biggest financial centre in Europe, with particular strengths in asset management, and home to four universities.

Ron Hewitt, of Edinburgh Chamber of Commerce, commented: "We are challenging the received wisdom that any new UK institution should be located in London.

"The Green Investment Bank is a big prize, not just for Edinburgh but for UK plc. Ministers should feel confident that by opting to locate the bank in Edinburgh, they are delivering best value and providing greater opportunity in this vital sector across the UK.

"Successful commercialisation depends on effective collaboration and partnership, not simply within the complex and extensive supply chains that are a key feature of the industry, but also between industry, technology and know-how and finance."

'Virtuous circle'

Nathan Goode, of Grant Thornton, who prepared the business case, said the right headquarters location could create a "virtuous circle" in which "finance can be used to drive the industry towards commercialisation".

He said: "If we accept that the pace of development needs to be driven hard to meet policy targets, this kind of opportunity should not be missed."

Those supporting the lobby of parliament included John Robertson, managing director of BiFab, the Fife-based offshore fabrication specialist, who said: "The significance of the 'green' energy sector to the Scottish economy will deliver maximum visibility and public profile for the organisation.

"Its distinctive role as an interface between government, the 'green' energy industry and financial markets strengthens the argument for a location outside London."

Martin McAdam, chief executive of Aquamarine Power, which is active in developing wave power technology, said: "Scotland's capital is emerging as a significant global hub for wind and marine energy business.

"Recent investments by ABB, Mitsubishi and Doosan reflect the growing international confidence in Scotland as a secure base for research, development and deployment of green technologies, while the country's periphery offers Europe's best onshore and offshore wind, wave and tidal resource.

"The establishment of the GIB in Edinburgh would cement the city's growing reputation in green energy and I am confident it would generate significant future inward investment and jobs."

Support for the Edinburgh Green Investment Bank Group comes from the Scottish Renewables trade body, Scottish Financial Enterprise, the Scottish Chambers of Commerce and development agency Scottish Enterprise.

It also has the support of Northern Ireland Chamber of Commerce.

Although no competition for the location of the Green Investment Bank has been announced by the government, it is understood that lobbying could also come from Newcastle, Manchester and Leeds.