The UK Government is planning to increase its spending on green technologies as it races to meet its net zero target. In order to meet that increased spending, however, it has decided to issue new green bonds.
Rishi Sunak, the Chancellor of the Exchequer, announced the new green bonds, noting that he wants to make the UK more open, more technologically advanced and a world leader in the use of green finance.
The green bonds will allow the UK Government to borrow money at a low interest rate. Investors will offer cash while being guaranteed a return, as Government bonds are historically the most secure form of investing.
The cash raised by the green bonds will go on to fund low-carbon energy infrastructure, which includes everything from electric vehicle chargers to improvements to UK homes that will make them more efficient. The Chancellor hopes that the extra money will boost the UK economy and help navigate it out of the Covid-19 slump.
While the issuance of green bonds is a good idea for funding low-carbon technologies, it’s not exactly a unique one. France, Germany and the Netherlands have already issued their own green bonds, while the European Union is eyeing up doing the same as a way to fund its coronavirus recovery programme.
What does this mean for the electrical industry?
The green bonds themselves won’t mean much for the electrical industry at all, it’s the cash that will be raised by them. That’s because much of that cash is going to be directed at our industry, whether it’s through the installation of electric vehicle chargers, new renewable sources of electricity, or simply through improvements to people’s homes.