UK Markets closed

New state-backed UK infrastructure bank launches

·3-min read
Chancellor Rishi Sunak pledged £12bn in the March budget for the creation of the new UK Infrastructure Bank. Photo: Hannah McKay/AFP via Getty
Chancellor Rishi Sunak pledged £12bn in the March budget for the creation of the new UK Infrastructure Bank. Photo: Hannah McKay/AFP via Getty

A new Infrastructure Bank aimed at helping Britain deliver on climate ambitions, boost jobs and growth has opened in Leeds on Thursday.

UK chancellor Rishi Sunak pledged £12bn ($17bn) in the March Budget for the creation of the new UK Infrastructure Bank. The Bank's £22bn of financial capacity will consist of £5bn of equity, £7bn of debt, and £10bn of government guarantees, helping to unlock over £40bn of overall investment.

The bank will help "level up" every part of the country, financing projects across several industries like renewable energy, transport, digital, water and waste. It will also help cut emissions as the UK transitions to net zero by 2050.

"Working in partnership with local government and the private sector, the Bank will harness investment tailored to the needs of specific infrastructure projects, offering a range of financing tools including debt, equity, and guarantees," the Treasury said.

The move is expected to be a "catalyst" for change and drive economic post-COVID recovery in the region.

Sir Roger Marsh OBE DL, chair of Leeds City Region Enterprise Partnership & NP11 said: "This landmark decision is testament to the strength of our financial and professional services sector and will ensure a strong and successful long-term economic outlook for the city region, the North and the UK."

"It will act as a catalyst to inspire economic growth and business confidence at a time when it is needed most and it is pleasing that it will be operating from Leeds."

Read more: UK government to crack down on 'greenwashing'

The bank, which is part of the government’s national infrastructure strategy, will be able to issue loans, equity, or guarantees to private projects from 17 June, and will start lending to local authorities in the summer.

Sunak opened and visited the bank's new office in Leeds on Thursday. The chancellor met senior leadership including the bank’s chair, Chris Grigg, and hosted a roundtable with local infrastructure and business leaders.

"Opening its doors today, the UK Infrastructure Bank will accelerate our ambitions for tackling climate change and levelling up, while creating new opportunities across the UK as part of our Plan for Jobs," Sunak, said. "Through the bank, we are investing billions of pounds in world class infrastructure that will support people, businesses and communities in every corner of the UK."

It will publish a framework document which sets out its relationship with government, as part of the opening.

Amanda Beresford, president of the Leeds Chamber of Commerce and Planning Partner at Schofield Sweeney said: "The Chamber is delighted to welcome the UK Infrastructure Bank to Leeds and we look forward to working with the organisation in identifying opportunities to invest in low carbon infrastructure and working towards a future net-zero economy."

Watch: Britain to treble tree planting by 2024 on path to net zero