The Green Investment Bank (BIS) has officially become a company, taking another step towards releasing £3bn of capital to fund low-carbon infrastructure.

UK Green Investment Bank was formed on Tuesday, which means the organisation set to be based in London and Edinburgh has licence to operate, pending state aid approval from the EU.

A BIS spokesman confirmed the bank had taken an important step towards its official launch. “Becoming a company is part of the gradual process towards becoming fully operational,” he said. “The next step will be to make the first senior appointments, which will be done shortly.”

Financier Sir Adrian Montague is leading the launch of the bank, which has already made £80m worth of funds available to the small-scale waste infrastructure sector, but will not be able to mobilise large-scale investment until Brussels gives the go-ahead.

The government expects approval to be granted towards the end of the year, and officials have signalled they are confident the EU will grant the necessary approvals.

However, uncertainty remains over the extent of the bank’s activities and when it should be able to begin borrowing.

The government has said the bank will not be able to borrow until it has met its deficit reduction targets, currently projected to be reached in 2015-2016.

But green businesses and NGOs have argued the rules should be relaxed to allow the bank to begin borrowing as soon as possible as a means of driving private capital investment into low-carbon infrastructure projects.

Commentators have also expressed concern that the proposed remit of the bank will force it to lend on fully commercial terms, meaning managers will be reluctant to back the kind of early stage technologies and higher risk projects the bank was set up to support.

Critics have argued this focus on commercial terms defeats the original purpose of the bank and risks the institution treading on the toes of already established private sector banks.