UK infrastructure bank

The first National Infrastructure Strategy (NIS) was published by HM Treasury on 25 November 2020 as part of the Spending Review. It described government plans to transform UK infrastructure based around three central objectives:

• Economic recovery.
• Levelling up and strengthening the Union.
• Meeting the UK’s net zero emissions target by 2050.

The strategy included plans to set up a new UK infrastructure bank that will co-invest in infrastructure projects alongside the private sector. The bank will operate UK-wide, will be based in the North of England, and will support the NIS objectives. It will also be able to lend to local and mayoral authorities for key infrastructure projects, and provide them with advice on developing and financing infrastructure.

The new bank will operate within a mandate set by government and will have a high degree of operational independence. It will replace some of the activities of the European Investment Bank (EIB) following the UK’s departure from the European Union. However, the bank will provide more targeted support than the EIB and will be better aligned with the government’s objectives.

It will use a range of tools to support private projects. As well as offering guarantees through the existing UK Guarantees scheme, it will be able to offer debt, equity, and hybrid products.

The 2021 budget will set out comprehensive details regarding the operations, mandate and scale of the bank. The government intends that the bank will be operational in an interim form from spring 2021 so that it can play a role in supporting the UK’s recovery from the COVID-19 pandemic. The government will legislate for the bank at the earliest opportunity, to put it on a statutory footing.

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