UK Infrastructure Bank backs Capital’s Green Finance Fund

UK Infrastructure Bank backs Capital’s Green Finance Fund

3 January 2024

The UK Infrastructure Bank has today announced a £190 million loan to support the decarbonisation of buildings, energy, and transport systems across London’s public sector.

The loan to the Greater London Authority (GLA) will cornerstone the Mayor of London’s Green Finance Fund (GFF). This enables eligible organisations including local authorities, social housing providers, NHS bodies, universities and colleges to access funding for their green projects, covering retrofit, heat networks, renewable energy generation, and green transport infrastructure. 

In line with the Bank’s joint mission to tackle climate change and boost regional and local economic growth, the loan will help the GLA deliver London’s 2030 net zero target. 

The GFF was launched at London Climate Action Week 2023 and will provide £500 million funding for green initiatives with all of London’s 32 boroughs eligible to apply. The fund aims to accelerate decarbonisation across the Capital by lowering the cost of borrowing for eligible organisations. 

The loan to the GFF means a wider range of projects can access the Bank’s funding to help tackle climate change.  

The GFF, which is the Bank’s first investment in London, will also give the Bank a blueprint through which to replicate similar schemes with other local authorities across the UK.  

Lorna Pimlott, UK Infrastructure Bank Managing Director, Local Authority Advisory & Lending, said: 

"The public sector has a huge role to play in tackling climate change and this transaction is an excellent example of how we can work in partnership with public sector organisations to realise their net zero projects.

“I hope our loan to the GFF also provides a model for how we can help other areas across the UK. We are keen to hear from other local authorities planning similar initiatives."

Sadiq Khan, Mayor of London, said: 

"There is no time to delay in tackling climate change and I would like to thank UK Infrastructure Bank for recognising that and providing this loan so we can deliver the innovative green initiatives the capital needs.

“By working closely together on projects to tackle the climate crisis and its impacts we can help build a better London for everyone, a cleaner and greener city for all."

The Bank’s Local Authority function offers the lowest cost finance for local authority infrastructure projects at gilts + 40bps and is keen to speak to UK Local Authorities and Combined Authorities to help support similar fund models for projects aiming to tackle climate change and boost regional growth. For more information, get in touch.

Read a new blog by our Chief Policy and Strategy Officers (job-share), Kate McGavin and Helen Williams, who reflect on the Bank's role in supporting infrastructure across the breadth of the UK to help deliver net zero and regional and local economic growth.