The expanding role of Government funded investors in the UK’s clean energy transition

This article was first published in The Herald.

The UK’s clean energy ambitions have never been short of targets. What they have often lacked is money willing to take the first risk. A trio of government-backed investors is increasingly filling that gap, financing everything from floating wind farms off Scotland’s northern coast to vast port redevelopments on the Moray Firth.

The National Wealth Fund (NWF), successor to the UK Infrastructure Bank, sits at the centre of this effort. Armed with a Treasury mandate and serious firepower, it aims to unlock more than £100 billion of investment by 2031 – enough, it claims, to support 200,000 jobs and cut 500 million tonnes of CO₂ emissions by 2050. The Scottish National Investment Bank (SNIB), established by Holyrood in 2020 with a £2 billion commitment, operates on similar principles: long-term, mission-driven patient capital prepared to invest in riskier projects. Each of NWF and SNIB seeks to crowd-in private sector capital to co-invest in their investments.

The newest arrival is Great British Energy (GB Energy), a flagship energy policy from Labour’s 2024 election campaign, formally launched in 2025. Unlike NWF and SNIB, which function primarily as lenders and financial investors, GB Energy takes direct equity stakes in projects and will co-develop projects with partners, aiming to give the public a lasting ownership interest in the infrastructure it helps build. Its strategic plan, published in late 2025, targets up to 15GW of clean generation and storage capacity by 2030, backed by £8.3 billion of public funding over this parliament.

Together, the three institutions are already reshaping what gets built (and what doesn’t). Rising capital costs and complex technology risks have made a growing number of clean energy projects challenging on a bankability basis, when viewed on purely commercial terms. The participation of these bodies has, in several cases, been the difference between a project proceeding and stalling.

The evidence is tangible. In order to accelerate priority grid upgrades, NWF has provided loans and guarantees to a number of transmission operators which run into the multi-hundreds of millions. This infrastructure is essential to absorbing new renewable generation. In 2024, NWF and SNIB jointly provided senior debt to Haventus to redevelop 350 acres at Ardersier Port into an offshore wind supply hub. SNIB contributed to the funding package secured by Highview Power for a 3.2GWh long-duration energy storage project in southwest Scotland. And all three institutions have taken equity positions in the Pentland Floating Offshore Wind Farm – a technology still in its commercial infancy but one that could deliver huge benefits in the clean energy transition.

That willingness to absorb early-stage risk is precisely the point. Floating offshore wind, long-duration storage, and port infrastructure for supply chains are all sectors where the UK needs to build industrial capacity quickly, but where returns remain uncertain and timelines are long.

Critics will ask whether public capital is crowding out private investment, or simply subsidising projects that the market has already assessed and rejected. Proponents will point to the impact (and indeed success) the Green Investment Bank had in scaling the offshore wind sector, and that patient finance is necessary to realise the commercial potential of these long-term infrastructure projects.

What is clear is that the line between state and market in UK energy finance is blurring fast. As the net-zero deadline approaches, it may blur further still, but that may be the only way to achieve government ambitions for clean energy generation and decarbonisation.

Shepherd and Wedderburn are headline sponsors of All-Energy 2026, 13-14 May, SEC Glasgow.

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