Bristol has failed in its bid to attract the Government's Green Investment Bank, losing out to Edinburgh and London.
Business Secretary Vince Cable said the headquarters will be in Edinburgh, with the main transaction team in London.
Bristol was seen as being among the favourites to attract the bank. The city launched its bid campaign, called Bristol: The Natural Home for the Green Investment Bank (GIB), shortly before Christmas with a high-profile delegation to the Houses of Parliament. Since then the city council, West of England Local Enterprise Partnership (LEP) and a raft of senior business figures have got behind the bid.
Bristol's strength in green technology, renewable energy and financial services – as well as its role as one of the UK's leading 'green' cities were all seen as counting in its favour.
However, announcing the result this morning, Mr Cable said: "Harnessing the strengths of Edinburgh and London will support the Green Investment Bank's ambition to become a world leader.
"Edinburgh has a thriving green sector and respected expertise in areas such as asset management. London, as the world's leading financial centre, will ensure that the GIB's transaction team can hit the ground running.
"This decision will allow the GIB to operate effectively and achieve its mission of mobilising the additional investment needed to accelerate the UK's transition to a green economy."
The bank is designed to accelerate private sector investment in "green" projects and is expected to employ 50-70 full-time staff across the two sites, with the number of staff based in Edinburgh expected to rise from 2015.
Scottish Secretary Michael Moore welcomed the news, saying: "I am delighted that the Green Investment Bank will be headquartered in Edinburgh.
"Scotland has enormous green energy potential and its capital is the UK's second biggest financial centre."
More reaction follows later
