LONDON (Reuters) - A government agency would report back to UK finance minister Alistair Darling within weeks on the options for a green bank to stimulate offshore wind and other big infrastructure projects, treasury officials said on Tuesday.
"Of course we continue to review the policy framework ... (including) the provision of capital," said Chris Martin, director of public services and environment at the finance ministry, called the Treasury.
"That is why we"ve asked Infrastructure UK to report back."
Darling in December gave a remit to a new agency, Infrastructure UK (I-UK), to explore the case for a low carbon investment institution -- often dubbed a green bank -- and report back to the government at the time of the budget expected this month or next.
Benefiting sectors could include energy and rail.
I-UK would report on funding gaps: "What particular sectors, what the institution might look like, what the particular problems are there in the availability of capital," Martin told lawmakers, in a committee hearing.
The offshore wind industry may be facing "particular market failures in provision of debt," especially at the project start-up phase, he added.
Britain in January awarded energy companies the rights to develop the world"s biggest offshore wind project in hopes the country would become a leader in the emerging industry, considered vital to meet the country"s carbon emissions and renewable energy targets.
In total, the government hopes the programme will deliver up to 32 gigawatts (GW) of generation capacity, or enough to meet a quarter of the UK"s electricity need by 2020.
But construction costs would amount to about 80 billion pounds ($119.9 billion), experts estimate, and some analysts doubt that the private sector will stump up such cash in a rather untested technology, without more subsidies.
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