The UK is urgently looking to raise tens of billions of pounds to meet its green investment targets by 2030. The country wants to raise a total of £57 billion for this purpose, with the new ruling Labour Party already pledging £7.3 billion.
The targets have been set to help key industries go green and thus make the country less dependent on fossil energy. The added benefit is that more people can work in sustainable sectors.
The £7.3bn already committed will end up in a National Prosperity Fund that will invest in ports, green hydrogen and factories dedicated to electrifying the economy, called gigafactories, among other things. The plans were revealed in a report by a taskforce advising Prime Minister Keir Starmer on setting up the fund.
Private investments
Various private capital flows could also help meet investment targets. But according to the report, this will not be nearly enough to close the remaining investment gap. There could still be a gap of between £35.9bn and £56.9bn. “Even if a clear policy direction is set, providing the certainty investors need, there will still be projects that are not funded because the level of investment appetite exceeds the threshold for commercial investors,” said Ryan Maree Thomas, chief executive of the task force.
Interests
For years, there has been debate in British politics about whether the UK should create a sovereign wealth fund. The interests in which it should be invested differ greatly between the political movements that Labour and the Conservatives adhere to. Politicians from both parties have proposed different ideas for the structure of the fund. The task force recommends that the fund should use different financial instruments, such as equity and guarantees, but should not grant pure subsidies, as they do not provide the expected return.
