The war in the Middle East has once again exposed deep vulnerabilities in the UK’s energy system. As regional instability disrupts international oil and gas supply chains, there is a risk that a prolonged energy price spike could lead to a further deterioration in living standards. As the UK enters its second fossil fuel price shock in four years, the role of public financial institutions is more critical than ever to spur investment towards a cleaner, more secure energy system.
The government has made tangible progress but must now accelerate efforts to mobilise clean investment as a driver of energy security, faster growth and improved living standards while capitalising on the opportunities from clean growth. The clean economy grew at 10% between 2023-24, supporting close to a million jobs across UK supply chains, with the average productivity per worker nearly 40% above the national average. Well-resourced public financial institutions can serve as a core vehicle to translate policy ambition into sustained economic growth.
E3G’s latest briefing sets out how targeted institutional reforms can build on current momentum to strengthen the effectiveness of the public financial institutions ecosystem and enable higher levels of private investment. Key recommendations include:
- Strengthen access and coordination across public finance institutions;
- Clarify investment principles and strengthen prioritisation to guide the deployment of public capital;
- Strengthen project development and market readiness to scale an investable project pipeline.