BBC: European Investment Bank EIB – investment in UK renewables and water infrastructure
The fallout from last week’s vote to leave the European Union is rattling business and finance, far and wide. One aftershock is being felt at the European Investment Bank. The EIB is owned by the 28 member states of the EU. The UK, alongside Germany, France and Italy, is among its largest shareholders, with about 16%. The bank provides finance to a wide range of projects around Europe, with a particular focus on areas like infrastructure, social housing, renewable energy and education. It invested £5.6bn (6.7bn euros) in the UK last year and has ploughed £42bn (50bn euros) into the country over the last decade. But after the Leave vote, there may already be a freeze descending on some new investment. The good news is that the EIB says that its recent deals in the UK should proceed as planned. Those include funding to an automotive parts business in County Durham, to Swansea University, to housing associations in Northern Ireland and to an off-shore windfarm in Scotland.
European Investment Bank threat to investment – Business Green – James Murray
Business Green ‘As George Osborne raises prospects of corporation tax cuts, reports suggest pipeline of clean energy projects in line for European Investment Bank loans could be impacted by UK withdrawal from EU. Questions are being asked about the potential impact of Brexit on the UK’s ability to access highly competitive loans for green energy and other key infrastructure projects from the European Investment Bank (EIB).
The Times reported that billions of pounds of potential investment in clean energy and other projects have been jeopardised by the vote to leave the EU, after the bank provided more than £42bn of low cost loans over the past decade. The bank, which is a backer of the London Array offshore wind farm and has emerged as a major investor in the UK’s clean energy transition, has stressed that no current loans will be affected by Brexit. But a spokesman said there was “clear uncertainty” about the pipeline of future loans given the unprecedented scenario where a shareholder in the bank has voted to leave the EU.
A number of green infrastructure projects currently being considered by the EIB could be impacted by the on-going uncertainty, including the Neart Ha Gaoithe 450MW offshore wind farm and a planned £400m water infrastructure project planned for the East Midlands by Anglian Water.
The news follows warnings earlier this year that Brexit could limit the UK’s ability to access funding from the EIB, leading to a direct impact on green infrastructure projects. The UK has been the biggest recipient of the EIB’s Climate Awareness Bond Project, taking nearly a quarter of the €7.2 bn invested in renewable energy and energy efficiency projects since 2007.
However, Peter Munro, head of investor relations for the bank, told news agency Bloomberg that Brexit could affect the bank’s ability to invest in the UK. “If you’re not a shareholder or you’re not part of the EU, you wouldn’t derive the same privileges as a shareholder or an EU member,” he said. Meanwhile, George Osborne today sought to inject confidence into the business community post Brexit, telling the FT he wants to cut corporation tax to below 15 per cent, a move that would give the UK the lowest business tax rates of any major economy.
He said the move would be part of a five point plan, which also includes a renewed push to attract investment from China, continued support for bank lending, a redoubling of efforts to build a ‘northern powerhouse’, and a commitment to maintaining the UK’s fiscal credibility – a pledge interpreted in some quarters as a hint that further cuts may be required.
The plan could offer a boost for the Hinkley Point nuclear project, which is being backed by Chinese investors alongside developer EDF. Energy and Climate Change Secretary Amber Rudd said last week that she had spoken to EDF and both the company and the government remained committed to delivering a positive final investment decision for the project. But reports last week suggested EDF’s board is split on whether to give the project the green light and critics are arguing the policy instability created by Brexit provides a reason to shelve the project.
Meanwhile, climate sceptic think tank the Global Warming Policy Foundation is to host an event this evening at the House of Lords calling for the fifth carbon budget, which was approved by the government last week, to be scrapped in the wake of the Brexit vote. The think tank last week demanded a review of the decision, arguing the impact assessment for the fifth carbon budget was based on the assumption the UK would remain in the EU and would continue to be part of the bloc’s emissions trading scheme.
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