The UK's green investment bank will be investing in UK low-carbon infrastructure projects within a year, and is expected to have assisted in injecting £15bn into the green economy within four years, Nick Clegg told a City of London audience on Monday.

The deputy prime minister cheered investors by setting out key concessions when announcing the details of the long-awaited new bank, the government's flagship green policy, which is intended to provide the capital to transform the UK to a low-carbon economy.

He said the bank would be set up under legislation, to give it independence from ministers – a major concern for investors, who feared that Treasury plans to avoid legislation and retain control over the bank would spell years of damaging political interference. Clegg said: "We are determined this organisation will be part of the institutional architecture of this country. The green investment bank will go from an idea to a flow of investment in under two years, and quickly grow into an independent investing, and then borrowing, institution. A real legacy of the coalition government's green commitment."