Could Green Bonds be a Viable Solution in the UK?

published Nov 12, 2014
1 min read

What are Green Bonds?


Scottish Renewables is a member organisation dedicated to strengthening business relationships and committed to securing the best possible environment for the growth of renewable energy in Scotland. Scottish Renewables encourages the new UK government to launch green bonds that would support green energy projects while giving economic benefits to British citizens.

There is a great confusion around the term “green bonds” since it is a very wide concept that can include many different assets. The green bonds we are referring to are the green infrastructure bonds that are used as financing means for low carbon infrastructures. They are rated by rating agencies and are traded on the market. They could be the link between institutional investors and green energy projects since these agents could buy and sell these assets without any intermediary.

Why Investing in Green Bonds?

This investment is considered as a win-win situation: on the one hand, UK citizens gain from investing in green projects that will bring long term advantages and savings. On the other hand, green projects become more independent by acquiring a reliable funding source that uses national capital instead of foreign borrowings.

In addition, in the short term these programmes ensure that energy demand is covered and in the long term, renewable energy sourcing will be developed even further. Last but not least, this is a way for the government to gain community engagement in ownership and investment.

What are the Plans?

The Westminster government has committed to start new projects in order to reduce CO2 emissions and to get closer to its 2020 renewable energy targets. Moreover, greater emphasis is put on renewable resources for different uses that include heating as well as transportation. The plan also includes systematic meetings between the national government and local authorities in order to evaluate the current situation of renewable energy exploitation and the financial resources to be allocated in this sector.

There is a huge growing potential for such resources that could effectively substitute fossil fuels while dramatically cutting the costs. Scotland could generate half of its needed energy from renewables and many other countries could become more energy independent as well. With green bonds, governments could power the endless chain of easy gains and enduring benefits. This is a great opportunity and they shouldn’t let it go.