The privatisation of the Green Investment Bank (GIB) is underway, with business secretary Sajid Javid promising it “will continue to do what it says on the tin”.
An invitation to private sector investors to register their interest comes in a report submitted to Parliament and the devolved administrations.
Individual investments must meet one of five environmental purposes, and create a wider portfolio which makes a positive overall reduction in greenhouse gas emissions.
In December, the Environmental Audit Committee claimed ministers had not produced convincing evidence that the GIB would better achieve its aims in the private sector. It feared:
- a move from novel and complex projects that struggle to find funding in favour of easier, more commercial projects
- a privatised GIB could invest in areas that may damage its reputation and undermine its leadership role in the green economy
Last month, Javid pledged a ’special share’, to be held by an independent company, which would then have to give consent if the GIB were to change its sustainability focus.
The Government says the intentions of potential investors to commit to and protect the GIB’s green values will be taken into account in the assessment of bids.
In the three years since it was launched, the bank has committed £2.6bn of capital to almost 70 green infrastructure projects across the UK.
Announcing the sale in a speech at the Lord Mayor’s trade and industry dinner, Javid said: “The GIB was a world first, and it is a sign of its success that the idea is being copied across the world. Having proven the business model works, we now want to make an even greater impact.
“The challenge presented by climate change is clear: it is imperative we mobilise more funding for green energy projects. The special share structure protects the bank’s green mission meaning the GIB will continue to do exactly what it says on the tin.”
Lord Smith of Kelvin, chair of the bank, said: “Attracting new investors is vital if the GIB is to fund its ambitious plans to double the size of its business, expand into new parts of the UK green economy and deliver a growing green impact.
“I am confident that the sale process will provide it with good new owners who will support the GIB’s continued growth and leadership role in the global green economy long into the future.”
Shaun Kingsbury, chief executive of the GIB, said: “It is an exciting investment opportunity, providing new investors with predictable returns and significant growth opportunities. The business is perfectly placed to play a leading role as the world moves decisively towards an unprecedented programme of green infrastructure investment.”