By Susanna Twidale
LONDON (Reuters) - Britain's government-funded bank investing in green energy projects will launch a 1 billion pound ($1.7 billion) fund dedicated to buying stakes in operational offshore wind projects in the country, the bank said on Tuesday.
The Green Investment Bank (GIB) participation is a boost to Britain's offshore wind sector which has seen a series of project cancellations over the past few months.
In March, British utility SSE announced it was shelving two planned offshore wind projects and reducing its stake in a third to cut costs.
"GIB's plans for a dedicated offshore wind fund are a real boost for our industrial strategy in a sector where we have a strong competitive advantage compared to other countries," Business Secretary Vince Cable said in a statement alongside the Bank's annual results.
Britain already has 3.6 gigawatts of installed offshore wind capacity but is counting on the development of other wind farms to help it cut carbon emissions in the electricity sector.
The Bank hopes the fund will help attract new investors to the offshore wind market such as sovereign wealth funds and pension funds.
The GIB is already a major investor in offshore wind and acquired stakes in two offshore wind farms owned by Denmark's Dong Energy [DOENRY.UL] and Germany's RWE Innogy, respectively, for nearly 500 million pounds at the end of March.
RESULTS
Over the last financial year, ending March 31, the GIB has committed 668 million pounds to 18 green energy projects, the results showed.
Investments include 250 million for a waste management centre in Merseyside and 11 million pounds to purchase and upgrade a biomass plant in Port Talbot, Wales.
Alongside the government money, an additional 1.9 billion pounds of private investment has also been committed to the projects, taking the total investment in Britain's green economy over the period to 2.5 billion pounds.
Many of the investments, however, are still in construction leading to a 5.7 million pound loss for the year, the results showed.
(Reporting by Susanna Twidale; Editing by Mark Potter)