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Bonuses at top despite flagship Green Bank's £6m loss

THE Government's flagship Green Investment Bank (GIB) made a net loss of £6.2 million before tax in its first 10-and-half months of doing business.

The first annual report of GIB, which opened its headquarters in Edinburgh in November 2012, also revealed the firm paid its part-time chairman Lord Smith of Kelvin £102,258 for the same period.

The 68-year-old former pupil of Allan Glen's School in Glasgow will receive £120,000 for a full year at the bank.

The chief executive, Shaun Kingbury, who received pay including pension and benefits of £153,370 in his first five months, received a further incentive bonus of £52,000 to be paid in 2015, subject to shareholder approval.

The board awarded the company a score of 76% for its performance in meeting business objectives.

The report, which covers May 15, 2012, to March 31, 2013, said: "As would be expected, in this stage of our operations, the first period of financial results shows a loss as our capital has not yet been fully invested and is, therefore, not generating sufficient returns to cover our investment and operational costs."

The bank has access to £3 billion of public money to invest in four priority sectors: offshore wind, energy efficiency, waste-to-energy, and waste recycling.

The report revealed the institution had invested £635m in low-carbon projects during its first year of operation, leveraging £1.6bn of private investment.

The largest single investments to March 2013 were the £125m made available to the Green Deal energy efficiency scheme and £100m to help Drax power plant convert to biomass.

Business Secretary Vince Cable said the bank had made a "positive start", with every £1 so far invested leveraging another £3 of private investment.

"The Green Investment Bank has a pivotal role to play in the financing of our transition to a green economy and has a number of strong deals in the pipeline which will help it build on the solid foundations that have been laid."

However, GIB chief executive Shaun Kingsbury cautioned that 2013 would be a challenging year for the green economy.

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