The UK Green Investment Bank plc has announced plans to raise a new £1bn fund with the publication today of its performance for the financial year to 31st March 2014.

GIB committed £668m to 18 green energy projects during 2013-14, more than doubling the number of green projects it backed in its first year. GIB is now the most active investor in the UK’s green economy.

An additional £1.9 billion of private money has been committed to these projects alongside GIB’s own investment, taking the total to £2.5bn of new investment. The Bank said it has now co-invested with more than 70 domestic and international private investors and has delivered the mobilisation of approximately £3 of private capital for every £1 it invests.

Since its inception in 2012, GIB has itself committed £1.3bn, with up to an additional £3.5bn successfully committed from private investors, resulting in a total of up to £4.8bn of UK green infrastructure projects.

GIB’s current portfolio, once built, is projected to earn taxpayers an average return of 8% per annum, with every investment on track to make a profit.

With only 18 months of activity so far, the majority of GIB’s investments (88% by value) remain in construction. In line with standard accounting practice, a significant proportion of income is deferred to future years. As a consequence and in line with expectations, GIB recorded an operating loss of £5.7m in the current year. GIB is on track to reach sustained profitability once its current portfolio is built and operating.

The GIB is now planning to launch a £1 billion fund to acquire equity stakes in operational offshore wind projects in the UK – the Bank is seeking a suitable group of strategic, long-term co-investors to participate in the innovative capital raising exercise. The Fund will be managed by a GIB subsidiary which is currently regulated by the Financial Conduct Authority (FCA) and will be seeking permission from the FCA to become a regulated fund manager.

In May 2014 GIB received State Aid approval from the European Commission to promote and manage funds and other co-investment structures for mobilising upfront private sector investment into its designated sectors.

The widening of GIB’s activities is a significant strategic development as it will enable GIB to promote and manage funds and all other types of structured co-investments within any of its designated green sectors, allowing it to raise and deploy private sector capital in addition to its current £3.8bn of equity funding from the UK Government. GIB is targeting a first close on the Fund by the end of the calendar year.

Shaun Kingsbury, chief executive of the Green Investment Bank, said:

"Our role goes well beyond that of a traditional investor. We are providing a positive demonstration effect by successfully committing capital to profitable, green infrastructure investments. We are making a difference across the UK by taking on the tough projects, de-risking new technologies and lowering the cost of capital for our sectors."

“We want to do more to maximise our green impact. We plan to extend our reach into new markets like community-scale renewables.”