Exclusive: Rishi Sunak to pledge £22bn for new bank in Budget to boost green economy

Rishi Sunak is to deliver the Budget next week
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Britain’s growing green economy will receive a major boost in next week's Budget when Chancellor Rishi Sunak pledges £22billion for a new UK infrastructure bank, The Telegraph can disclose.

Mr Sunak will set aside an initial £12 billion of capital and £10 billion of government guarantees for the UK Infrastructure Bank in next week’s Budget.

The cash comes ahead of the UK hosting the climate change COP conference in Glasgow in November.

The new Bank will launch in the Spring and operate UK-wide and it is hoped will unlock billions more in private finance to support £40billion of infrastructure investment for the economy.

Treasury officials said it should help to achieve the UK’s commitments on net zero and 'levelling up' communities which extra Government support.

Speaking ahead of the Budget, Mr Sunak, said: “We are backing this Bank with the finance it needs to deliver modern infrastructure fit for the 21st century and create jobs.

Mr Sunak will deliver the budget next week - AFP
Mr Sunak will deliver the budget next week - AFP

“This shows how serious we are about levelling up the country so that everybody can benefit from our future prosperity.

“Britain’s businesses and the Great British public deserve world-class infrastructure and that is exactly what this new Bank will help us deliver for them.”

The new Bank will offer a range of products, including equity, loans and guarantees, which can be tailored to support the needs of private sector infrastructure projects, in sectors such as renewable energy, carbon capture and storage and transportation.

It will also offer infrastructure loans to mayors and local authorities at low rates to help fund high-quality projects in every region and nation – helping to level up the UK.

It will provide world-class advice and support to help deliver complex infrastructure projects, sources said.. Of the £12billion, £4 billion is set aside for local authority lending and £8 billion for private projects.

In addition, the Bank will be able to issue £10 billion of government guarantees. The Chancellor is also expected to commit a further £375 million to co-invest alongside the private sector in high-growth, innovative UK firms.

The ‘Future Fund: Breakthrough’ scheme will ensure the government continues to support highly innovative companies, such as those working in life sciences, quantum computing, or clean tech, that are aiming to raise at least £20 million of funding.