Will the Green Bond scheme represent good value for money?

I am committed to making London net zero carbon by 2030 and I am clear that the GLA group should lead by example. One way of helping to achieve this is through our Green Bond scheme, which allows us to borrow now to finance green infrastructure and repay the borrowing over time, using the savings achieved from lower energy bills or related revenue streams. The GLA is a large, trusted organisation with an AA credit rating, meaning we can achieve economies of scale through this approach while achieving the best possible borrowing terms. To really make the most of this opportunity, we will offer participation to London boroughs and other public bodies so they can benefit from our economies of scale, too. Like-for-like, Green Bonds can provide better value for money with better borrowing terms than any other borrowing options because with more and more people coming to understand the severity of the climate crisis we are all facing, investor demand for assets with a positive environmental impact is increasing.

Of course, financial plans like this are always subject to market conditions and there has been a lot of upheaval in recent months. Our approach to the Green Bond scheme will respond closely to the market and the need to secure the best value for money. Alongside the £4 million to develop the high-impact green investment opportunities for the public and private sector, I have allocated £86 million specifically to support a substantial GLA Green Bond Programme, financing direct decarbonisation investment by the GLA group and its strategic partners. This investment will support projects making social housing and public buildings energy-efficient as well as clean local energy projects providing solar photovoltaic (PV), heat pumps and district heating across London. By leading the way with this initial £90 million commitment, we are working to help unlock over £500 million to finance low-carbon projects across the city. To make sure we get the biggest impact for every pound we invest, we are in the process of assembling a small team of expert analysts, working closely with officers across the GLA group.

Thank you very much, Mr Mayor. I wonder if you could set out for us how the Green Bond scheme might improve the lives of ordinary Londoners, for example, those in my constituency of Merton and Wandsworth. You just ran through a list of the kind of things that it might go towards. Could you give us a couple of examples?

It is worth putting on record a direct benefit your constituents are facing from your lobbying in relation to a Low Emission Bus Zone in Putney High Street, which had record levels of pollution when I first became Mayor, which you brought to my attention. That was the first area that benefited from our Low Emission Bus Zones. Similarly, what we are going to do is use your knowledge of your area, through your council as well, to learn what sort of things we can do to help finance improvements in relation to energy efficiency and lower bills.

Think about social housing. Now that there is decent leadership in Wandsworth Council, maybe it will want to work with us in relation to not just more council housing but retrofitting the current existing social housing/low-cost housing. There is insulation, better glazing, and you can benefit from some of the district heating we are doing and so forth. That is the sort of thing we want to do, working with councils both through London Councils and directly. There are other local projects you may know of or you may want to tell us about - you, local MPs or the council - to help reduce the footprint in your area. You have a number of fire stations in your area, and you may want to work with the London Fire Brigade (LFB) to lobby us and similarly there is the police presence in your area as well. We are trying to work with partners in terms of the public sector. The NHS is crucial and so if you have any GP practices or health clinics who want to work with us in relation to projects they have, if not through the NHS London, we are more than happy in relation to this. The idea is to leverage in private sector finance to support reducing our carbon footprint across our city.

It is really exciting to hear that, and I have no doubt that local authorities and housing associations will start to take advantage of this in this very, very practical way. I might well come to talk to you or talk to the staff who are looking at this in detail for the Henry Prince Estate, where there are roofs which could be solar and a river that runs behind. I do not know whether you have ever been to the Henry Prince Estate. You must go there sometime.

A lot of my misspent youth was spent there and doing things I should not in the River Wandle there.

Do you think though that your Green Bond Scheme is ambitious enough? Having had a look at what happened with the Government Green Gilts launch, it was oversubscribed by 12 times so there is obviously a very big appetite for this. Can you scale up this scheme if it turns out to be equally oversubscribed?

We have to be careful, particularly with interest rates going up. I may have this figure wrong, and I do not want to give a figure in case it is wrong. The Government had to pay a lot more back in interest in the gilts over the last few weeks with interest rates rising and the same applied with London Power. You have to be careful not to jump in with both feet because you can get burnt.

Sure.

We have seen across the country other cities being burnt by their experience with their energy suppliers, and we have not been, by the way. Similarly with the Green Bonds. As it is, £9 million equates to £500 million. We will see how it works in the first year or so, the first couple of years, and see if there is more ability to pump-prime this area to act as a catalyst to get private sector money. The good news is there is a big appetite in the private sector, not just because their shareholders are demanding it and because their customers are demanding it but because they understand the future is green, in that you cannot really think about fossil fuel investments and so forth. By the way, we should be incredibly proud that we have divested from fossil fuels as far as the GLA and our partners across London are concerned. Working with mayors across the globe now, we have divested more than $400 billion away from fossil fuels, working with 18 other cities. That shows where we lead, others follow, and the same goes with Green Bonds.

Yes, I think the cautious beginning and then making decisions in the light of the emerging situation is clearly the best approach with the new Green Bond initiative, which is exactly what City Hall did with London Power. Thinking of the Government, however, we appear to have an absolute vacuum of green ideas. The only one that I have heard of so far is rival candidates, obviously now down to two, talking about removing the Green Levy on energy bills. How important is it that cities like London, Manchester and elsewhere around the country lead the way in terms of seizing these opportunities to take us to net zero in the light of the huge fires that we have seen this week and the massive pressure on infrastructure?

Let me just say, on a regular basis you challenge me, rightly so, in relation to what support I am giving Londoners to insulate their homes. A lot of the money we give in relation to the Warmer Homes Grant comes from the Green Levy. If somebody is saying, “Remove the Green Levy”, unless it is replaced from general taxation, our ability to support families, poorer families and pensioners to have warmer homes through the grant will go.

Can we dig into that about the insulation there just for a minute? You are talking about it in terms of warmer homes, but of course insulation, both in the loft and wall insulation, which we are very poor at - we have very leaky buildings in this country - also stops the heat from coming in.

Yes, it leads to cooler homes in the summer and warmer homes in winter and it also reduces your bills. Also, imagine if those homes, which had smaller bills - warmer in winter, cooler in summer - also had energy supply that is from renewable sources. That is whether it is what we do in north London with the heat from the Tube or whether it is investment in solar and in wind. The advantage of our power purchase agreement - again criticised by some for not being 100%; we are doing 10%, maybe 20% to start off with to make sure things work - is that it can influence the market so there is more renewable coming onstream, because TfL is the biggest purchaser of energy in London. Question: can that influence the market? The benefits will not just be felt by TfL. We could also, using the economies of scale, leverage in councils and other buildings to see them getting the benefits and they, working with us, can also influence the renewable market as well.

It is just as well that London, Manchester and other mayoralties are stepping up because we have had 12 wasted years from the Government so far. Thank you very much, Mr Mayor. Thank you, Chair.

Was there a question there, Assembly Member Cooper? OK, can I move to the next question, please?