UK Climate Change and Industry minister Nick Hurd confirmed on 20 April that a deal had been agreed to sell the Green Investment Bank to Australian bank the Macquarie Group.
The deal, which has the backing of GIB’s independent board, was secured through a competitive process and “will meet the objectives government outlined when it launched the sales process last year. As well as securing value for money for the taxpayer and freeing GIB from the constraints of public sector ownership, it will enable GIB to grow its support for green projects” according to a ministry statement. The GIB’s immediate plan will be to look at investing at least £3 billion into the green economy.
The UK government hopes to have secured the GIB’s future as a green investor. Nick Hurd commented: “The Green Investment Bank has been very successful in attracting private capital to the UK’s green economy. It now makes sense to move it into the private sector where it will be free from the constraints of public sector ownership, allowing it to build further on its success. This deal gives us the best of both worlds. We have secured fair value for the UK taxpayer. GIB has a well-funded new owner that is committed to the Bank’s green mission, with a track record of success in green investment and an ambition to grow the business”.
Today’s sale to Macquarie, with a transaction value of around £2.3 billion, ensures that on completion, all taxpayer funding invested in GIB since its creation, including set-up costs, has been returned with a profit.
Launched in 2012, GIB has been a huge success story, supporting nearly 100 green infrastructure projects in the UK to date. For every £1 it has invested, it has attracted another £3 of third party capital.
GIB will become the primary vehicle for Macquarie’s renewable energy investment in the UK and Europe, with a commitment to target £3 billion of new green infrastructure investment over the next three years, exceeding GIB’s track record of committing £3.4 billion of investment over the 4 and a half years since it was established.
Macquarie has published a series of commitments for the future of GIB under its ownership, including maintaining GIB’s green purpose and green objectives, in line with the ‘special share’ arrangements to safeguard GIB’s green purpose which will be held by five independent trustees, maintaining the GIB platform and brand, and to utilise the skills and experience of GIB employees in Edinburgh and London.
The sale to Macquarie, a bank with a reputation for asset stripping, has attracted strong criticism ever since it became apparent that Macquarie was the front runner, and that has not abated.
Dr Doug Parr, policy director at Greenpeace UK, commented: "At a time when the government should be shoring up low carbon industry for post-Brexit Britain, they have given away one of our key tools for advancing green technologies. The hole left by the Green Investment Bank will slow our transition to a clean energy system, set us back on reaching our climate targets, and mean more of the jobs from new sectors will go elsewhere.
If the government picks up its pace, the UK could be a world leader in renewable and green technology. But selling a great British success story, which levered private money into eco-projects, to a controversial Australian bank known for asset-stripping, is a disaster. We need investment in the booming clean technology industry in the UK, for skilled jobs, fairer bills and a healthy economy to see us through the next uncertain few years and in to the future."