John Flint, chief executive of the UK Infrastructure Bank, addressed attendees at the Sustainable Finance Live 2023 conference, discussing the bank’s involvement in the HS2 replacement plans for the North of England. While he refrained from commenting on the HS2 decision, he noted that there are up to £30 billion of transport projects anticipated for funding in the region, often through local authorities with which the bank is developing advisory relationships.
Flint emphasized the expanding role of the UK Infrastructure Bank, stating, “Our sandbox has gotten a little bit bigger so there’s a bit more for us to be doing.” He outlined the bank’s mandate, created by HM Treasury two years ago, highlighting that it operates with only one shareholder, no regulators, and no competitors. With £22 billion of public funding to deploy, the bank aims to support infrastructure development that will contribute to achieving net-zero goals and promote regional and local economic growth.
Addressing the challenges posed by transitioning to a low-carbon economy, Flint dispelled the notion that significant profits would come easily from climate transition. He stated, “We have to decommission a no longer fit for purpose high-carbon industrial economy, and someone’s going to have to pay for it.” He pointed out that although governments currently cover much of this cost, sustainable progress will require the private sector to adapt its expectations of returns and risks.
Flint urged the audience to reconsider their risk appetite, noting that while private sector investors express interest in financing projects, they often seek the UK Infrastructure Bank’s assistance in mitigating risks and achieving minimum returns. He cautioned that while the bank could help in some cases, this approach wouldn’t sufficiently address the extensive investment needs in the UK, which far exceed their available capacity.
Looking ahead, Flint expressed hope that over the next few years, the conversation could evolve toward a more collaborative approach, stressing that the private sector cannot rely on the bank to de-risk every project indefinitely.