The UK Infrastructure Bank (UKIB) is becoming the National Wealth Fund (NWF), as announced by Chancellor Rachel Reeves at the International Investment summit in London today.
The new NWF will expand UKIB’s remit beyond infrastructure in support of the Government’s industrial strategy.
With additional financial capacity and an enhanced risk budget, the NWF will be capitalised with £27.8bn to catalyse private investment.
From its HQ in Leeds, the NWF will expand its team, securing additional sector expertise to support its new remit.
Clare Barclay, CEO of Microsoft UK, will chair the government’s new Industrial Strategy Advisory Council.
Alongside boosting its private sector investments, the NWF will continue to provide commercial and financial advisory services and lending to local authorities, strengthening its partnerships with Mayors to support the Government’s growth ambitions.
The new organisation will also take on a more sophisticated partnership role with Government departments, bringing investment expertise and policymaking closer together, to accelerate policy development which supports and grows the market.
The key sectors the government will focus its ‘Invest 2035: modern Industrial Strategy’ are advanced manufacturing; clean energy industries, creative industries; defence; digital and technologies; financial services; life sciences; and professional and business services, and be supported by a green paper ahead of a spending review next spring.
The NWF will continue to make private sector investments against a clear set of principles, with a focus on crowding in private finance to sectors and technologies which are critical to the UK’s clean energy and growth ambitions.
The government will set out further details of the NWF’s role in delivering the Industrial Strategy in a statement of strategic priorities, as well as reviewing the organisation’s success metrics, before the next financial year.
Since it was established three years ago, the UK Infrastructure Bank has committed £3.3bn and unlocked nearly £11bn in private investment.
Reeves said today’s announcements are the first step in delivering on this government’s central mission to secure sustainable growth, rebuild Britain and make every part of the country better off.
In the energy sphere, Germany has almost twice as many renewable jobs per capita as the UK; Sweden almost three times; and Denmark almost four times as many.
With the right policy, the Government believes it can stimulate investment to grow the clean energy industries to deliver across all areas of the country – including in the UK’s industrial heartlands.
The Climate Change Committee estimates that by 2030, up to 725,000 jobs could be created in low carbon sectors and that moving to clean homegrown sources of electricity will reduce the UK’s dependence on volatile fossil fuel imports, improving energy security.
John Flint, CEO, at the National Wealth Fund said, “We will hit the ground running, using sector insight and investment expertise that the market knows and trusts to unlock billions of pounds of private finance for projects across the UK.”
“With additional capital to deploy against a bigger mandate, we stand ready to help the market invest with confidence, in support of the Government’s growth ambitions.”
Hugh Crossley, CEO at Equitix, believes the NWF is in safe hands utilising the platform and structures already in place at the UKIB.
“Equitix is a very significant investor in UK infrastructure, it has an established working relationship with UKIB and stands ready to support and invest alongside the Government to grow the economy through green investment,” he said.
Amanda Blanc, CEO at Aviva, said we now need closer working between government and business and greater pace to turn good ideas into investable projects which can make a difference. “Today’s National Wealth Fund announcement is a significant step in the right direction,” she said.
Antonio Simoes, Group CEO at Legal & General, said building a clean, secure energy supply is fundamental to the UK’s economic growth. “The NWF will form an important part of the wider ecosystem that is catalysing private capital and investment into green infrastructure and industries, together enabling the path to Net Zero,” she said.
