Source · Select Committees · Public Accounts Committee
Recommendation 16
16
Accepted
The Bank was set up to address market failures and fill gaps in financing for...
Conclusion
The Bank was set up to address market failures and fill gaps in financing for infrastructure investment.41 The Bank told us that it can do this by taking risk that the market is just not willing to take, for example in “first-of-a-kind” technology. It also told us that it can take policy risks in areas that the market might not be comfortable with, developing an understanding of the direction of policy and working to amplify interventions in those policy areas.42 In general, equity investments are more suitable for higher-risk projects and are more complex transactions to undertake. In due course the Bank plans to build a portfolio of different financial instruments covering a range of different technologies and risk.43 The Treasury has specified the five sectors it wants the Bank to prioritise – clean energy, transport, digital, water and waste.44
Government Response Summary
The Bank has published its first strategic plan in June 2022, which sets out the Bank’s investment strategy. The Bank has already made 12 deals worth £1.16 billion across a range of priority sectors and have further deals in the pipeline. The Bank’s role is to crowd-in private investment.
Government Response
Accepted
HM Government
Accepted
3.2 The Bank has worked closely with the Treasury to ensure there is a clear strategic outlook in its first 18 months and beyond, and to this end the Bank has already published its first strategic plan in June 2022. The plan clearly sets out the Bank’s investment strategy, including its priority areas for investment and the range of investments that it expects to make. It is right that as parts of its operations the Bank assesses market needs and reviews deals against its objectives – and is already doing so successfully. The Bank has already made 12 deals worth £1.16 billion across a range of priority sectors and have further deals in the pipeline. The Bank’s role is to crowd-in private investment, and therefore the Bank’s proactive investment strategy needs to carefully consider this.