The Government has confirmed the sale of part of its stake in the Green Investment Bank (GIB) with the Chancellor saying he is “exploring options for moving the bank into the private sector”.
The move came as the GIB held its annual review event in London, reporting that it had reached profitability two-and-a-half-years after being established to provide funds for a renewables sector struggling to win over conventional sources of investment.
No figure is being put on the stake but the Financial Times said it would be 70% and a total sell-off had been explored.
George Osborne said the GIB had gone from “strength to strength”.
“That is why we can now begin exploring options for moving the bank into the private sector to enable it to access larger pools of capital and act more freely to invest in a broad range of green sectors,” he said.
Business secretary Sajid Javid added: “The GIB has shown that investment in green technologies can be a profitable business. The challenge now is to build on this success.
“The bank will still be green, still be profitable, still be a market-leader in financing environmentally sound infrastructure. But free from limitations on where it can borrow money and EU regulations on state aid, the bank will be able to access a much greater volume of capital,” he added.
GIB chief executive Shaun Kingsbury, left, said the organisation was “very close” to its expected long-term investment rate of £800m to £1bn per year but capital from the Government would not be enough to sustain investment.
“Attracting [private] investors is a key strategic step for GIB. It will not only ensure that we have the capital to grow but it will allow us to borrow and to invest in a broader range of green infrastructure projects.
“We have appointed advisers to support us on this. We do not expect to make an announcement in the short term.”
The Prime Minister visited its Edinburgh headquarters shortly after the election and said: “GIB is leading the world in finding innovative solutions to make sure that the UK is at the forefront of the next generation of energy infrastructure”.
Launched with £3.8bn of public funding, the bank has so far committed just over £2bn to 50 projects, supplemented by £6bn of private capital.
The bank moved into profit in the second half of its 2014-15 financial year and reported a modest full year profit of £100,000.