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Early interest in GIB

Early interest has been shown from investors in the Green Investment Bank (GIB) after the announcement of its intended privatisation.

The bank’s chief executive Shaun Kingsbury said he expects investors to be attracted by its sustainable focus.

When business secretary Sajid Javid announced the GIB’s privatisation, he promised it would continue to invest in green businesses.

After concerns raised by the Environmental Audit Committee, Javid had previously announced that GIB’s private ownership would include a ’special share’ held by an independent company, which would then have to give consent if the bank were to change its sustainability focus.

Now Kingsbury (pictured) has said the bank’s success in the three years since its creation has led to interest in the bank less than a week since it announced its privatisation.

“We have a highly attractive portfolio of investments and a strong pipeline of future opportunities,” he said.

“This has meant that the announcement of our intended privatisation has drawn early interest from large-scale and long-term investors, including pension funds, insurance funds, financial institutions, private equity, banks, sovereign wealth funds and infrastructure funds, at home and abroad.”

Individual investments must meet one of five environmental purposes, and create a wider portfolio which makes a positive overall reduction in greenhouse gas emissions.

Despite these stipulations and the special share, some concerns remain that the bank’s private ownership could hamper its focus as an investor in sustainable business.

But Kingsbury said “the opposite is true”, and that moving into the private sector will give the bank borrowing powers to access more capital to invest in UK green projects.

“The kind of investors we think will be interested in acquiring this bank will be doing so because they value the attributes that have made it a success.

“The sums required mean we will need to see a decisive shift towards a fully commercial and competitive marketplace for scalable technologies like wind, solar, waste and energy efficiency.

“These technologies are ready to go and costs are falling rapidly. The GIB is perfectly placed to provide the investment expertise required to accelerate the construction of these projects.”

The sale process will involve two separate rounds.

In the first, applicants will be asked to submit non-binding initial bids containing detailed information about the business and its forward plans.

Selected bidders will then submit final binding offers in the second round after being provided with additional information to enable them to carry out due diligence on the bank.

A leading investor in the waste sector has told MRW that the GIB’s privitisation could change the nature of the bank but not its environmental focus.

Nigel Aitchison, partner at Foresight and head of its environmental division, said the establishment of the GIB four years ago was “a stepping stone towards a privatisation of some sort”.

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