BRUSSELS (Reuters) - EU regulators said on Wednesday they had given approval for 3 billion pounds ($4.8 billion) in British state aid being used for the creation of the Green Investment Bank, which is intended to spur private investment in low-carbon projects.

The Commission said in a statement an investigation found sufficient safeguards to avoid the "crowding out of private investment", and that the provisions governing the bank would also ensure fair competition.

"In particular, project holders seeking funding from the Green Investment Bank will be requested to provide evidence that they have been denied funds or have not obtained all the necessary funding from market operators," the Commission said.

The bank's operating principles also include providing funding in addition to market financing, where possible.

"This should allow green projects to materialize while minimizing potential distortions of competition," it added.

The bank, headquartered in Edinburgh, began to invest directly in projects earlier this year and is expected to be given full borrowing powers by around 2015.

Its initial targets are projects in the offshore wind, waste and non-domestic energy efficiency sectors.

($1 = 0.6211 British pounds)

(Rex Merrifield, Brussels newsroom)