State aid approval gives UK GIB the remit to make investments on commercial terms across a wide range of green economy sectors.
The bank has been set up by the government to invest in smaller waste infrastructure, renewable energy projects and non domestic energy efficiency projects.
Business secretary Vince Cable said: “This marks an important step. Funded with £3 billion of government money and mobilising additional private capital, the UK Green Investment Bank has the potential to make a significant contribution to the development of a green economy. State aid approval gives the bank the green light to expand investment in the UK’s green infrastructure.”
Shaun Kingsbury, the bank’s chief executive officer, and six new non-executive directors will take up their positions on the board on 29 October. The official launch of UK GIB will be at the end of November.
UK Green Investment Bank chairman Lord Smith said: "This is excellent news and a very important milestone as we transition to a low carbon economy and work to boost investment across the industry. We have already made significant progress in building our teams and the necessary infrastructure for the Bank and we expect to be fully operational in the next few weeks. We clearly have challenges ahead but we have the people, the expertise and the capability to deliver on our priorities and create the foundation for a new climate of green investment."