UK Infrastructure Bank explained

Type:	State owned development bank
Industry:	Financial services
Predecessors:	-->
Successors:	-->
Founded:	June 2021
Location:	Leeds, England, UK
Area Served:	United Kingdom
Owner:	UK Government

The UK Infrastructure Bank (UKIB) is a British state-owned development bank. It is intended to help with the UK Government's plan to reach net-zero carbon by 2050 and to support economic growth in regional and local sectors across the United Kingdom.^[1] Then Chancellor of the Exchequer, Rishi Sunak, stated that the bank would be tasked to invest in sectors such as "renewable energy, carbon capture, storage and transportation", and would provide "low-rate loans to mayors and councils to fund projects".^[2] The bank is publicly owned with its sole shareholder being the Treasury Solicitor in the capacity of HM Treasury. The bank was given initial capital amounting to £12bn, is able to offer up to £10bn of government guarantees, with its final capacity being £22bn.^[3]

History

The UK Infrastructure Bank was announced in the government policy paper, "National Infrastructure Strategy: fairer, faster, greener", on 25 November 2020.^[4] Its founding document was published by HM Treasury on 17 June 2021. In July 2024, Chancellor Rachel Reeves announced a new £7.3bn National Wealth Fund to decarbonise Britain's heavy industry, which would be disbursed by the UKIB over five years.^[5]

Operation

The firm's core objective is, with cooperation of private and public sector entities, "to increase infrastructure investment to help to tackle climate change and promote economic growth across the regions and nations of the United Kingdom." The firm seeks to pursue this goal with two objectives:

• "To help tackle climate change, particularly meeting the government’s net zero emissions target by 2050."
• "To support regional and local economic growth through better connectedness, opportunities for new jobs and higher levels of productivity."

Six priorities were established for the operation of the firm to meet the two above objectives:

• To achieve policy objective and generate a positive financial return over time, to tackle climate change, support economic growth, and reduce the burden on the taxpayer
• To operate in partnership with private and public sector entities together
• To prioritise investments which lack a significant amount of private sector financing
• To operate independently of the shareholder while meeting conditions imposed thereby
• To exist as a long-lasting institution and provide long-term capital through its investments
• To have the flexibility to respond to differing market conditions in order to deliver on its mandate

Portfolio

!Name of Investment !Location !Investment amount!Citation

South Bank Quay	Teesworks, on Teesside	£107m	^[6]
Fibrus	Belfast	£220m	^[7]
Cornish Lithium	Cornwall	£24m	^[8]

Notes and References

1. Web site: 3 March 2021. UK Infrastructure Bank Framework Document. 31 January 2022. www.gov.uk.
2. News: 2021-03-03. Budget 2021: UK Infrastructure Bank to be based in Leeds. en-GB. BBC News. 2022-01-30.
3. Web site: 2021-06-29. Launch of the UK Infrastructure Bank. 2022-01-30. Blake Morgan. en-GB.
4. Web site: 25 November 2020. National Infrastructure Strategy: fairer, faster, greener. 31 January 2022. www.gov.uk.
5. Web site: New £7bn National Wealth Fund to start green investment ‘immediately’ . . 30 July 2024.
6. Web site: Dawson . Kristy . October 25, 2021 . Thousands of jobs for Teesside as UK Infrastructure Bank invests £107m in Teesworks development . Teesside Gazette.
7. Web site: Breslin . John . April 27, 2022 . Ulster Bank lends £50m to Fibrus for roll-out of full fibre broadband . Belfast Telegraph.
8. Web site: Cornish Lithium announces 'landmark' £53.6 million investment . Business Live . 8 August 2023 . 8 August 2023.