The UK public funded Green Investment Bank is planning to raise a £1 billion ($1.7 billion) fund to encourage new private investors to invest in offshore wind farms.

The UK public-funded Green Investment Bank is planning to raise a £1 billion ($1.7 billion) fund to encourage new private investors to invest in offshore wind farms.

The bank said in a statement that it was seeking to raise £1 billion from a “suitable group of strategic, long-term co-investors” to invest in offshore wind farms in the UK.

The Green Investment Bank is a “for profit” bank launched in November 2012 with the aim of accelerating the UK’s transition to a greener economy through investment in green schemes that would otherwise lack funding due to their perceived risk.

The fund will be managed by a subsidiary of the Green Investment Bank which is seeking permission from the UK Financial Conduct Authority to become a regulated fund manager. GIB is targeting a first close on the fund by the end of the calendar year.

The Green Investment Bank said the fund launch was a “significant strategic development” that would enable the bank to promote and manage funds and all other types of structured co-investments within any of its designated green sectors.

Last year, the Green Investment Bank invested £668 million in a total of 18 projects. Although it made a loss of £5.75 million, the bank said this was in line with current expectations and that it expects its portfolio of current investments to earn a return of around 8 per cent per annum once built.

“Our role goes well beyond that of a traditional investor. We are providing a positive demonstration effect by successfully committing capital to profitable, green infrastructure investments. We are making a difference across the UK by taking on the tough projects, de-risking new technologies and lowering the cost of capital for our sectors,” said chief executive Shaun Kingsbury.

“We want to do more to maximise our green impact. We plan to extend our reach into new markets like community-scale renewables. And we plan to raise new capital for the first time through the creation of a new £1 billion fund for operating offshore wind assets,” he added.