National Wealth Fund Taskforce
The National Wealth Fund, with its proposed £7.3bn of public capital, presents an opportunity to design a first of kind public-private partnership, that deploys catalytic capital to crowd private investment into priority net zero sectors.
The GFI is providing advice to the Government on how to structure and implement its commitment to create a National Wealth Fund. Dr Rhian-Mari Thomas OBE, CEO of the GFI, is the chair of an independent taskforce that includes the CEOs of some of the UK’s leading financial institutions.
Governance structure
Incepted by: Chancellor of the Exchequer, the Rt Hon Rachel Reeves MP
Chair: Dr Rhian-Mari Thomas OBE
Secretariat provided by: The Green Finance Institute
Mark Carney: Former Governor of the Bank of England
The Taskforce’s Terms of Reference.
FAQs
Please note that the following FAQs relate to the GFI's role in the NWF Taskforce; they do not cover off the specifics of implementation.
1. What is the National Wealth Fund?
The National Wealth Fund (NWF) is a sovereign backed green catalytic fund – it will seek to create markets for investment into new technologies and infrastructure which drive economic growth, job creation and ensure food and energy security for the UK.
Creating the infrastructure that transitions the economy for the future requires around £50 billion between 2030 – 2050 (according to analysis from the Climate Change Committee). That needs significant private sector investment. The NWF will invest in nascent technologies or projects at the initial stages of market development, to address risk and reduce private sector barriers to investment and in so doing, make these technologies commercially viable and get money flowing to ensure they are built.
By using £7.3 billion of public capital through the National Wealth Fund as seed capital to create investment models and markets we believe we can crowd in multiples of that investment (up at least £20 billion) from private markets to achieve Government industrial policy objectives that will deliver economic growth, jobs and infrastructure for the future.
2. Why do we need a National Wealth Fund?
The Climate Change Committee has estimated that it will cost £50 billion for the UK to reach net zero – this is an immense investment opportunity for both the public and private sector to transform the economy. The NWF will use £7.3 billion in public sector funding to unlock at least £20 billion in private sector finance to catalyze investment into new infrastructure and economic transition to power growth and jobs across the UK and create the foundation for a low-carbon economy.
3. What are the priority areas for the fund?
There are five preliminary sectors where NWF capital could help to catalyse private investment:
- Green steel
- Green hydrogen
- Industrial decarbonisation
- Gigafactories
- Ports
4. How will the NWF operate?
The NWF will be overseen by an independent board and investment committee at arm’s length from the government, managed by financial professionals and would mobilise capital and seek a return on investment. This is not a grant-giving body.
To ensure that the NWF delivers for investors, government and industry, the NWF Taskforce believes it needs operational independence but strategic alignment with government via a clear mandate and complementary economic policy. It must be additive, flexible and have speed-to-market
For speed-to-market, the NWF’s capital should initially be managed and deployed by an existing organisation(s) in the current UK development finance architecture. UKIB has been highlighted as one potential organisation of best fit. The launch of the NWF should be accompanied by a review of the government-owned development finance institutions with the objective of simplification, building economies of scale and reducing friction for private investors.
5. What type of investment and catalytic finance will the NWF offer?
The NWF must be mandated to deploy a broad range of products and financial instruments, recognising that intervention differs by sector. Equity, deployed at higher levels of risk appetite with a broad range of risk-adjusted returns to attract the broadest investor appetite, is paramount. The ability to also offer concessional debt, guarantees and price assurance products (potentially including contracts for difference and offtake contracts) would enable the NWF to take a ‘Swiss-army-knife’ approach, and deploy capital in a way that most effectively mobilises private capital.
6. What is the GFI’s role in the NWF?
The GFI is the UK and Europe’s principal forum for innovation in green finance and exists to accelerate the transition to an environmentally sustainable and resilient economy by catalysing investment to create jobs, power economic growth, ensure food and energy security and drive the transition to a low-carbon economy.
In 2024, the then Shadow Chancellor – Rachel Reeves – appointed the GFI to run the Taskforce Secretariat, with GFI’s CEO, Dr Rhian-Mari Thomas OBE, being invited to take on the role of Chair.