New UK Infrastructure Bank May Boost Gigabit Broadband and 5G

The HM Treasury has announced that its plan to setup a new UK Infrastructure Bank, which was first proposed in last year’s Spending Review, will be supported by an initial £12bn in capital investment and £10bn in loan guarantees. In theory this could help to unlock more private investment, such as to boost the gigabit broadband rollout.

The idea of creating an Infrastructure Bank to help crowd-in private investment isn’t a new one and the UK will probably follow a similar model to that of the European Investment Bank (EIB). However, Brexit meant that UK projects were no longer eligible for new operations from the EIB, which is reserved for EU member states and thus an alternative was needed.

At present the exact details of how this new UK “bank” will work are still unclear, but it will probably be operationally independent and work to encourage private finance by reducing risks, promoting market stability, and increasing investor confidence via products such as equity, loans and guarantees.

Rishi Sunak, UK Chancellor, said:

“We are backing this Bank with the finance it needs to deliver modern infrastructure fit for the 21st century and create jobs. This shows how serious we are about levelling up the country so that everybody can benefit from our future prosperity.”

Julian David, CEO of techUK, said:

“A £12 billion infrastructure bank and £375 million boost to the successful Future Fund are welcome announcements from the Chancellor ahead of the budget.

Ensuring that the new National Infrastructure Bank can invest in digital infrastructure and the new Future Fund: Breakthrough scheme aims to increase investment across the UK will be vital to building an inclusive recovery. Enabling access to world leading digital infrastructure across the country and providing funding for the next generation of entrepreneurship will be vital to make sure that opportunity and success is not limited by location.

If the UK falls behind in the rollout of 5G this could see us lose up to £173 billion in growth over the next decade. We also need to ensure that high growth firms outside of London are well supported, as while the Future Fund was a lifeline for many at the height of the pandemic over 60% of funding went to London based firms.”

The bank itself is expected to launch this spring, and it’s predicted that it could fuel a £40bn spending spree on infrastructure.