Deputy prime minister Nick Clegg confirmed the timing today and said legislation would ensure the independence of the institution.

Clegg said: “Investing in a greener future is an ambition that combines an ethical duty and an economic duty.”

More details about how the bank will operate will be provided by Business Secretary Vince Cable shortly.

Clegg said:  “Most countries have a development bank, but the UK will be the first country to have a national bank dedicated to the green economy.

“The initial £3bn capital by 2014/15 should enable the bank to catalyse an additional £15bn of investment in the green infrastructure.”

Institution of Civil Engineers (ICE) Director General Tom Foulkes said: “The National Infrastructure Plan set out the need for £200bn to be invested in the nation’s infrastructure over the next 5 years, and for over 70% to come from private investment.

“The structure of the Green Investment Bank was always a real test of the Government’s commitment to securing this investment and despite its inability to borrow until 2015 and the relatively small start up fund, today’s announcement finally brings the idea of an independent, permanent institution to reality.

“It is vital that momentum is now not lost and that industry and investors alike have confidence in the Bank.

“Government should appoint a figure with real credibility across the infrastructure and finance communities to drive forward progress and ensure the Bank can grow and deliver as one of the core funding streams for our future infrastructure.”